Rishi Sunak’s tax summary for 2023 reveals he paid over £500,000 in taxes after realizing a £1.8 million profit from his investment in a US fund. The report, released by the prime minister, discloses a tax bill of £508,308 for the financial year 2022-23 on total earnings and gains of £2.23 million. Sunak’s effective tax rate in the UK was 23%, lower than the top rate of 45%, due to some income being taxed at source in the US and the capital gains tax rate being 20%.
Despite the freeze on tax thresholds and the temporary rise in national insurance, Sunak has maintained unchanged headline rates on capital gains during his tenure as chancellor and prime minister. His salary as prime minister, £139,477, accounts for only 7% of his total income for the year. Additionally, he received a £276,218 dividend and £17,189 in interest on savings and investments in the US.
Questions may arise about Sunak’s preference to hold a significant portion of his wealth in the US rather than the UK. His investments, as per his accountants’ summary, were managed under a “blind management arrangement,” where he didn’t directly receive the gains as income but was still liable to pay tax on them.
Jeremy Hunt, the chancellor, also published his tax return concurrently, indicating a tax payment of £117,418 on an income of £208,547 and a capital gain of £208,058. Hunt’s earnings included rental income of £27,370 and dividend income of £35,997.
Sunak’s personal wealth and connections to the US have been subjects of scrutiny. He faced criticism in 2022 for holding a US green card while in office and for his wife’s non-dom status. The prime minister and his family own multiple properties, including a Grade II-listed manor in his constituency, equipped with a new heated swimming pool that necessitated an upgrade to the local electricity network.
Robert Palmer, the executive director at Tax Justice UK, highlighted disparities in the tax system, noting that individuals earning primarily from their wealth, like the prime minister, are taxed at much lower rates than those relying on labor income. There’s a call for reforms to ensure equitable taxation between income from work and income from wealth.