The recent donation of shares by Akshata Murty, wife of Chancellor Rishi Sunak, to the charity Koru Kids has stirred discussions about potential tax benefits resulting from this generous act. Mrs. Murty decided to contribute her stake in the childcare firm to charity, citing her involvement as an “unfair distraction.” While the charitable act is commendable, it has raised questions about the financial implications, particularly concerning tax reductions.
According to The Mirror, Mrs. Murty’s decision to donate more than 27,000 shares in Koru Kids to ShareGift, a UK registered charity accepting share donations, came after her association with the firm attracted unwanted attention. The move not only aligns with philanthropic intentions but also introduces potential tax advantages. In the UK, donations to charity are exempt from capital gains tax, a financial gain tax applicable to profits from the sale of assets such as shares.
Had Mrs. Murty opted to sell the shares instead of donating them, she would have been subject to capital gains tax on any profits generated. The exemption from this tax, coupled with the ability to deduct the value of the shares from income tax, could result in a significant reduction in the overall tax liability for Mrs. Murty. However, the exact financial impact remains unclear, as the value of the shares at the time of donation is not publicly disclosed.
This development follows a standards probe faced by Chancellor Rishi Sunak for failing to declare his wife’s interest in Koru Kids, a childcare provider poised to benefit from government incentives. In August 2023, Sunak issued an apology for the oversight, acknowledging that he had “inadvertently” breached the MPs’ code of conduct by not disclosing Mrs. Murty’s stake during parliamentary inquiries. The subsequent correction to the record was also found lacking.
The connection between the donation and the potential tax reduction has prompted debates about the optics of such actions, especially for individuals closely associated with public figures. While charitable contributions are generally encouraged and celebrated, the intertwining of philanthropy with financial benefits can lead to questions about transparency and ethical considerations.
Koru Kids, one of six private childcare providers set to benefit from a government pilot scheme, had Chief Executive Rachel Carrell expressing concerns that media attention surrounding Mrs. Murty’s investment overshadowed the company’s efforts to improve family access to care. Downing Street declined to provide comments on the matter.
