Rishi Sunak paid more than half a million pounds in tax in 2023 after making a £1.8m profit on his holding in a US investment fund, a summary of his tax affairs shows.
The prime minister published the document on Friday, showing he paid a tax bill of £508,308 in the financial year 2022-23 on overall earnings and gains of £2.23m.
This means he paid an effective tax rate of 23% in the UK – much lower than the top rate of 45% – because some income was taxed at source in the US and the rate of capital gains tax is lower at 20%.
Sunak has in effect been raising income taxes because of the freeze on the tax thresholds and the temporary rise in national insurance, but headline rates on capital gains have remained unchanged during his time as chancellor and then prime minister.
The Trades Union Congress (TUC) tweeted after the release: “It really is a mystery why Rishi Sunak raised income tax but not capital gains tax.”
His £139,477 salary as prime minister represents just 7% of his total income that year. In addition to the £1.8m gain, he received a £276,218 dividend, and £17,189 of interest on savings and an investment fund in the US.
The tax return will raise questions about why Sunak appears to hold much of his wealth in the US rather than the UK.
According to the summary provided by Sunak’s accountants, those investments were held under a “blind management arrangement”, which meant he did not receive the gains as income but had to pay tax on them nevertheless.
Jeremy Hunt, the chancellor, published his tax return at the same time. It showed he paid tax of £117,418 on income of £208,547 plus a capital gain of £208,058.
Within his earnings, Hunt made £27,370 from a rental property and £35,997 in dividend income.
Sunak first published his tax return in 2023, showing he had made nearly £5m over the previous three years due mostly to his US investment fund income.
Sunak’s personal wealth and his links to the US have been a sensitive issue for the prime minister. A former Goldman Sachs banker and hedge fund manager, he joined one of India’s richest families when he married Akshata Murty, the daughter of Narayana, the billionaire founder of Infosys.
Sunak was criticised in April 2022 after it emerged he had held a US green card while in office – meaning he had declared himself a “permanent US resident” for tax purposes for 19 months while he was chancellor and for six years as an MP. Murty was also criticised when it emerged she was a non-dom, and she subsequently pledged to pay tax on all worldwide income in future.
The prime minister and his family own several properties, including the home in his constituency of Richmond, in North Yorkshire, a Grade II-listed manor with a private lake and a new heated swimming pool. The pool will make such a large demand for energy that Sunak had to pay for the local electricity network to be upgraded.
Robert Palmer, the executive director at Tax Justice UK, said: “People will be shocked to learn the prime minister has such a low tax rate despite bringing in millions. But this is a feature of our broken tax system. At the moment someone who earns most of their money from their wealth – like the prime minister – pays a much lower tax rate than someone who relies on going out to work for their living. We need to fix this to make sure that income from wealth is taxed at the same rate as income from work.”