The chancellor’s spokesperson has now clarified that he possessed a US ‘green card”, meaning that he was by his own declaration a permanent resident of the United States of America. This raises a huge range of questions, issues and concerns, including whether he was either resident for tax purposes in the US and how he could have been following the laws and rules of both countries. Government ministers claimed Mr Sunak’s green card is a “hangover from his US days. His spokesperson said he kept it for “travel reasons”. However we know Mr Sunak submitted annual US tax returns to maintain it for a number of years after becoming an MP.
In any event, this clearly presents serious conflicts of interest with his duties as chancellor. If it was not declared, that must surely be in itself a significant breach of the ministerial code. If it was declared, that raises suggests successive prime ministers permitted a minister, and later chancellor of the exchequer, to remain a permanent resident of a foreign country.
It is a requirement for conditional permanent residency of the US that the chancellor would have been “considered a US tax resident for US income tax purposes”. This raises serious questions about whether the chancellor was a resident overseas for tax purposes even as he determined the policy in the UK. It also appears that the chancellor must have either repeatedly sought legal permission for extended but supposedly temporary periods of residence in the UK, or flagrantly broken the relevant rules of an allied democracy.
It is hard to see how in any event this can be compatible with the principles underlying the ministerial Code, such as honesty.
Moreover, the Guardian reported that when Mr Sunak was appointed chief secretary to the Treasury in 2019 he waived his salary for five months – a total of £34,000. There are serious questions about whether Rishi Sunak waived his salary as a minister in 2020 in order to avoid paying US tax. Indeed, by waving his salary, Mr Sunak thereby earned just under the maximum threshold that US green card holders can earn overseas and avoid paying US income tax, under the foreign earned income exclusion scheme.