Chancellor's wife Akshata Murty to pay UK tax on foreign income

However, in a statement, she said she did not want her tax status to be a "distraction" for her husband.

"I do this because I want to, not because the rules require me to," the statement added.

Mr Sunak has faced intense scrutiny following the disclosure earlier this week that Ms Murty, who is thought to be worth hundreds of millions of pounds, held non-dom status.

It has been reported that Ms Murty owns just over a 0.9% stake in her father's company, Indian IT giant Infosys, from which she received £11.6m in dividend income in 2021. 

While her tax-status is lawful, Mr Sunak faces intense criticism after her non-dom status was revealed earlier this week. 

Ms Murty 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 emphasised that she is not legally required to pay UK tax on offshore income.

"This means I will now pay UK tax on an arising basis on all my worldwide income, including dividends and capital gains, wherever in the world that income arises," the statement added. 

"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)."

However, the Chancellor faces further pressure after it emerged he had continued to hold a US green card - making him a "lawful permanent resident" of the United States while he was a senior minister. 

A spokeswoman for Mr Sunak released a statement confirming that he held a green card while Chancellor until seeking guidance ahead of his first US trip in a Government capacity, in October last year.

The US inland revenue says anyone who has a green card is treated as a “lawful permanent resident” and is considered a “US tax resident for US income tax purposes”.

The spokeswoman said Mr Sunak continued to file US tax returns, “but specifically as a non-resident, in full compliance with the law”, having obtained a green card when he lived and worked in the States.

Boris Johnson defended the Chancellor after coming under sustained questioning at a Downing Street press conference on Friday alongside German leader Olaf Scholz.

Allies of Mr Sunak reportedly suspect No 10 of seeking to undermine him through hostile briefings amid tensions over last month’s Spring Statement when he was accused of failing to support families struggling with the cost-of-living crisis.

However Mr Johnson said: “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.”

Labour said there were still “far too many troubling questions” to be answered and called for “full transparency” from Mr Sunak regarding his financial affairs.

A party spokesman questioned whether Ms Murty would use her Indian citizenship and a treaty with the UK dating back to the 1950s to avoid paying inheritance tax – move which could reportedly save tens of millions of pounds.

“This urgently matters because the Chancellor – the person in charge of our tax system and responsible for loading working people with the highest tax burden in 70 years – will still benefit from Ms Murty’s tax arrangements,” the spokesman said.

“Any further obfuscation cannot be tolerated, and it would be beyond shameful of the Chancellor if he does attempt to do so.”

Liberal Democrat treasury spokeswoman Christine Jardine said the Sunak family should now backdate the payment of the taxes in the UK in full.

“This shows that Rishi Sunak’s wife could have paid her fair share of taxes in this country all along, despite his initial claims,” she said.