By Simon JackBusiness editor
Chancellor Rishi Sunak's wife Akshata Murty has said she will pay UK taxes on her overseas income, following a row over her non-domicile status.
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.
As a non-domiciled (non-dom) UK resident she is not required by law to pay UK taxes on her overseas income.
But she told the BBC she did not want to be a "distraction" for her husband.
Her decision to change her tax arrangements follows accusations of hypocrisy against the chancellor, with Labour saying Mr Sunak's family is benefiting at a time when the cost of living is going up and the government he serves in is raising National Insurance payments.
The BBC estimates Ms Murty would have avoided £2.1m a year in UK tax through her non-dom status.
Ms Murty said her tax arrangements had been "entirely legal", but added: "It has become clear that many do not feel it is compatible with my husband's role as chancellor.
"I understand and appreciate the British sense of fairness and I do not wish my tax status to be a distraction for my husband or to affect my family," she said.
Mr Sunak has accused political opponents of "smearing" his wife to get at him.
Ms Murty will retain her Indian citizenship and her non-dom status which, as the BBC revealed, allows her family to avoid paying inheritance tax in the UK - which at current valuation could amount to £280m.
On Thursday, it emerged she pays £30,000 a year to maintain her non-dom status.
In her statement, Ms Murty said: "My decision to pay UK tax on all my worldwide income will not change the fact that India remains the country of my birth, citizenship, parents' home and place of domicile."
She said she would now be paying UK tax "on all my worldwide income, including dividends and capital gains, wherever in the world that income arises".
"I do this because I want to, not because the rules require me to. These new arrangements will begin immediately and will also be applied to the tax year just finished (2021-22)," Ms Murty added.
Her decision to pay UK taxes on her worldwide income comes on the same day it was revealed that she and her husband retained their rights to live and work in the US by having green cards - which requires holders to consider the US their permanent home - for more than a year after Mr Sunak became chancellor in 2020.
Speaking to the Sun newspaper, Mr Sunak said it was unfair to attack his wife as she was a "private citizen", adding: "I'm an elected politician. So I know what I signed up for."
Meanwhile, No 10 has rejected newspaper reports that its staff are leaking damaging stories about Mr Sunak to the media.
And Prime Minister Boris Johnson told reporters at a Downing Street news conference: "If there are such briefings, they are not coming from us in No 10, and heaven knows where they are coming from. I think that Rishi is doing an absolutely outstanding job."
What is a non-dom?
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 by stating on a tax return that they intend to live in the UK and wish to be considered British for tax purposes.
Ms Murty has chosen to be domiciled in India via her father, the billionaire Narayana Murty.
Read more here.
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