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Sajid Javid’s right to the “non-dom” status he held before entering parliament has been questioned by tax experts, who said the fact the UK health secretary was an international banker and his father was born in Pakistan would not be enough to entitle him to the perk.

Javid, who was briefly chancellor just over two years ago, admitted at the weekend that he had been non-domiciled in the UK for “some” of the two decades he spent working as an investment banker, allowing him to avoid tax on overseas earnings. He gave up that status in 2009 before he was elected to parliament the following year.

He broke his silence in the wake of revelations that Akshata Murty, the Indian-born wife of chancellor Rishi Sunak, is a non-dom — although she announced last week that she would start paying UK tax on all her global earnings.

Javid, who was born in Rochdale and raised in Bristol, told the Sunday Times he had secured non-dom status because his father was from Pakistan. But the birthplace of the father is only one of several tests an individual needs to pass to claim the tax perk under a law that dates back to 1799.

Tax experts said that to have maintained non-dom status Javid would have had to assert he did not intend to live in the UK indefinitely and furthermore demonstrate to HM Revenue & Customs that he had stronger “personal links” to the country of his chosen domicile than he did to the UK.

“It’s not entirely clear the basis of his non-domicile status,” said Dan Neidle, former head of tax at Clifford Chance, the law firm. “On the face of it, it seems a bit racier than Mrs Sunak’s claim.”

Nimesh Shah, chief executive at Blick Rothenberg, an accountancy firm, added there was “a question mark” over Javid’s non-dom status. “He was born here, he’s lived here most of his life. Whilst legally, there is a question mark here, this whole law is all very subjective . . . But his claim is not as strong.”

Javid held non-dom status for an unspecified period during the two decades when he was a wealthy globe-trotting banker.

In his statement to the Sunday Times he said he was a US tax resident during his first international posting in New York from 1992 to 1996 when he returned to Britain and became a UK tax resident. He said that after his return “for some of those years I was non-domiciled for tax purposes”, without specifying his domicile.

He subsequently moved to Singapore in 2006, returning to the UK again in 2009 when he gave up his non-dom status, a year before entering parliament to represent Bromsgrove. New rules that came into force in 2010 banned non-doms from becoming MPs and peers.

“Given heightened public interest in these issues, I want to be open about my past tax statuses,” Javid said in the statement. The health secretary also revealed at the weekend that he had held an offshore trust until he became a minister in 2012, at which point he dissolved it and paid 50 per cent tax on the money. The statement did not make clear whether that trust included overseas earnings from his time as a non-dom. Any overseas earnings remitted to the UK by a non-dom are liable to tax.

Ray McCann, a tax consultant and former HM Revenue & Customs inspector, agreed with Neidle that Javid’s claim to be a non-dom was certainly “weaker” than Murty’s. However, the time Javid spent in the US and Singapore meant he “undoubtedly had sufficient wriggle room” to make the claim, he added.

McCann said that prior to 2009, HMRC only checked claims for non-dom status infrequently. After that the tax authorities tightened up on claims after a change in the law required non-doms resident in the UK for seven years to pay an annual fee of £30,000 to retain the perk.

Javid did not respond to multiple requests for comment on any of the issues raised in this article.

 

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