Rishi Sunak demands inquiry into Akshata Murty tax leak

Chancellor Rishi Sunak is demanding a Whitehall inquiry to find out who leaked details about his wife's tax arrangements, the BBC has been told.

She owns £700m in shares of the Indian IT giant Infosys, founded by her father, from which she received £11.6m in dividend income last year.

Labour has accused Mr Sunak of hypocrisy, as the cost of living rises.

As a non-domiciled (non-dom) UK resident, Ms Murty is not required by law to pay UK taxes on her overseas income.

But on Friday, Ms Murty decided to change her tax arrangements, telling the BBC she did not want to be a "distraction" for her husband.

The BBC estimates Ms Murty would have avoided £2.1m a year in UK tax through her status.

No 10 has rejected newspaper reports that its staff leaked damaging stories about Mr Sunak to the media.

It has been a bruising week for the chancellor, and now he has asked senior civil servants for a full investigation to establish who divulged his wife's tax status.

His allies say very few people had access to the personal information, which Mr Sunak declared to Whitehall officials when he became a minister in 2018.

Some Conservative MPs say he was naive to think the details would remain private, and that he should have predicted that the tax arrangements would be criticised as inappropriate, despite being legal.

Mr Sunak's team has dismissed suggestions of a rift with Downing Street and say the prime minister has been "incredibly supportive".

But Mr Sunak's brand - vigorously promoted since he came to office - has been damaged, with some Tories questioning his judgement.

Friends have also confirmed to the BBC reports in the Sunday Mirror that the chancellor's wife and daughters are moving out of Downing Street and back to the family home in west London - where he will join them at weekends.

It is a decision said to have been made well before this row hit the headlines.

Opposition MPs have said Mr Sunak's family is benefiting at a time when he is putting up taxes for millions of others.

Labour MP Louise Haigh said: "I think the question many people will be asking is whether it was ethical and whether it was right that the Chancellor of the Exchequer, whilst piling on 15 separate tax rises to the British public, was benefiting from a tax scheme that allowed his household to pay significantly less to the tune of potentially tens of millions of pounds."

Mr Sunak has accused political opponents of "smearing" his wife to get at him.

A non-dom is a UK resident who declares their permanent home, or domicile, outside of the UK.

A domicile is usually the country his or her father considered his permanent home when they were born, or it may be the place overseas where somebody has moved to with no intention of returning.

For proof to the tax authority, non-doms have to provide evidence about their background, lifestyle and future intentions, such as where they own property or intend to be buried.

Those who have the status must still pay UK tax on UK earnings but do not need to pay UK tax on foreign income. They can give up their non-dom status at any time.

Ms Murty has chosen to be domiciled in India via her father, the billionaire Narayana Murty.