Rishi Sunak news - live: Chancellor defends wife over non-dom tax status as Labour demands answers

British chancellor Rishi Sunak is facing questions after The Independent revealed that his wife, Akshata Murthy, pays no tax in the UK on her vast foreign earnings, potentially saving her millions of pounds.

In a statement on Thursday, the chancellor defended his family’s financial affairs and hit out at what he called “smears” directed at his family, adding that scrutiny of his wife was unfair because she is a “private citizen”.

To understand Ms Murthy’s tax liability in India, experts said that is important to first clarify whether she is a resident or non-resident taxpayer in the country, writes Sravasti Dasgupta.

Our politics reporter Adam Forrest writes:

The Liberal Democrats have called for the cabinet secretary to launch an investigation into chancellor Rishi Sunak after reports emerged that he previously held a US Green Card.

Lib Dem leader Ed Davey has written to the cabinet secretary Simon Case – and the Independent Adviser on Ministers’ Interests Lord Geidt – urging them to open an investigation into whether Sunak broke the ministerial code by failing to declare his residency in the US.

Sir Ed Davey MP: “How could the man who is responsible for UK tax policy regard any permanent residency status for the United States as acceptable? This would be a huge conflict of interest – and a serious breach of the ministerial code.”

“Rishi Sunak must come clean about his own financial arrangements and whether he has ever held a Green Card. If he will not, then we need an independent investigation to get to the bottom of this.”

Boris Johnson has dodged a question on Akshata Murty’s non-dom status.

Asked if Rishi Sunak should provide more details on his family’s tax affairs, Mr Johnson told a No 10 press conference: “I think the chancellor Rishi Sunak is doing an absolutely outstanding job.

“As far as possible, as I said yesterday, I don’t think people’s families should be dragged into things.”

The PM was speaking after a meeting with German chancellor, at Downing Street, about the situation in Ukraine.

Boris Johnson has said he did not know Rishi Sunak’s wife had non-dom tax status – and emphatically denied briefing against his chancellor.

“If there are briefings, the briefing certainly aren’t coming from us at No 10 – heaven knows where they are coming from,” the prime minister told a Downing Street press conference.

“I think that Rishi is doing an absolutely outstanding job.”

Mr Johnson insisted Boris Johnson insisted that Mr Sunak had “done absolutely everything he was required to do”, after it was reported that he held a US green card for a period while chancellor.

Rishi Sunak has said that he held a green card while living and working in the US, but returned it following his first official trip to the US as chancellor.

Mr Sunak became chancellor in February 2020, and a trip to Washington DC some 18 months later – last October – was described by Sky News at the time as his “first official visit” to the US.

A spokeswoman for Mr Sunak said: “Rishi Sunak had a green card when he lived and worked in the US.

“Under US law, you are not presumed to be a US resident just by dint of holding a green card. Furthermore, from a US immigration perspective, it is presumed that permanent resident status is automatically abandoned after prolonged absences from the US.

“At the same time, one is required to file US tax returns. Rishi Sunak followed all guidance and continued to file US tax returns, but specifically as a non-resident, in full compliance with the law.

“As required under US law and as advised, he continued to use his green card for travel purposes. Upon his first trip to the US in a Government capacity as Chancellor, he discussed the appropriate course of action with the US authorities. At that point it was considered best to return his green card, which he did immediately.

“All laws and rules have been followed and full taxes have been paid where required in the duration he held his green card.”

My colleague Adam Forrest has the breaking story that Rishi Sunak has admitted to holding a US green card while chancellor, which you can refresh for updates:

Here’s some of the reaction from journalists to Rishi Sunak’s admission:

The Times’s political editor asks why the chancellor kept his green card for eight years after leaving the US – and how he was able to.

The Midwest correspondent at The Economist points out that Mr Sunak must have paid considerable sums in US taxes while holding the green card.

And Lewis Goodall of BBC Newsnight also questions why Mr Sunak kept the green card while an MP, suggesting the revelation “once again calls his judgment into question”.

SNP MP Stewart McDonald has joked that Liz Truss – who has been viewed as a rival of Rishi Sunak’s in the question of who could replace Boris Johnson – will be “chuckling in the Foreign Office”, following the latest revelation concerning the chancellor.

Liberal Democrat leader Sir Ed Davey has called for Cabinet Secretary Simon Case to investigate whether Rishi Sunak broke the ministerial code by failing to declare his US residency, which he said was a “huge conflict of interest”.

“Over the past few weeks when he should have been supporting struggling families up and down the country, he's been hitting them with a massive tax rise,” Sir Ed said.

“Never mind a green card; it's time to give Rishi Sunak the red card.”

But BBC Politics journalist Alex Partridge reports that there was some initial confusion over the strength of the Lib Dems’ “red card”.