Rishi Sunak: What is a US green card and why does it matter that the chancellor held one?

Overseas applicants must declare an intention to eventually become US citizens

(AP)

Chancellor Rishi Sunak has admitted to holding a green card while living in Downing Street - declaring him a permanent resident of the US.

It comes in the wake of The Independent’s revelation that Mr Sunak’s wife, Akhshata Murty, has non-dom tax status, which means she is not required by law to pay UK taxes on her overseas income.

A spokeswoman for the MP for Richmond, in Yorkshire, earlier released a statement confirming a Sky News report that Mr Sunak held a green card while he was chancellor until seeking guidance ahead of his first US trip in a government capacity.

Overseas applicants must declare an intention to eventually become US citizens if they are to be granted a green card.

In addition, holders are required to pay US tax on their global income and also make a legal commitment to make the States their permanent home.

But Mr Sunak’s spokesman said he had filed US tax returns while he held the green card, “specifically as a non-resident, in full compliance with the law”, adding “no rules were broken”.

As calls for the chancellor’s resignation mount, The Independent takes a look at what green cards are and why it matters that Mr Sunak held one.

What is a green card?

Known officially as a “permanent resident card”, a green card is a document that grants foreign nationals the right to live and work permanently in the US without becoming a full citizen.

According to US inland revenue, 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 eligibility criteria for receiving a green card is either being a relative of full US citizens or a foreign national wanting to live and work in the US.

Applications are open to those who can demonstrate “extraordinary ability in the sciences, arts, education, business or athletics, or … are a multinational manager or executive who meets certain criteria,” the green card website reads.

Holders of a green card - so named for the coloured card it was historically printed on - must pay tax in America and declare their intention to make the US their permanent home.

As such, the chancellor would have been expected to pay tax twice on some of his income - both in the US and the UK.

Why does it matter that Rishi Sunak held one?

Mr Sunak has been an MP since 2015, yet he only forfeited his green card in October last year.

But, according to US citizenship and immigration services (CIS) rules, those serving in a foreign government or standing for an election in a foreign government are not compatible with lawful permanent residence status.

Put plainly, Mr Sunak held the green card for nearly two years after becoming chancellor which legally declared him a “permanent US resident” - all the while living in Downing Street.

On Friday, prime minister Boris Johnson rushed to defend the chancellor in the wake of the revelations regarding his green card.

Mr Johnson said: “As I understand it the chancellor has done absolutely everything he was required to do.”

But the Liberal Democrat leader Sir Ed Davey, who had called for cabinet secretary Simon Case to investigate the a “huge conflict of interest” of the US residency, implied Mr Sunak should be fired.

“Never mind a green card, it’s time to give Rishi Sunak the red card,” Sir Ed said.

Meanwhile, Labour’s shadow chief secretary to the Treasury Pat McFadden questioned why Mr Sunak kept the green card after becoming MP, and whether it gave him “any tax advantage”.