Tory leadership candidate Nadhim Zahawi has hit out at “smears” over his tax affairs, saying he does not benefit from an offshore trust and has never held non-domicile status.

The newly appointed Chancellor denounced “inaccurate” and “unfair” reports in the media, adding that he has answered the allegations in the interest of transparency.

He pledged to publish his tax return annually if he is made prime minister.

The Independent reported that the Chancellor’s finances were being investigated by HMRC after a secret inquiry was initially launched in 2020 by the National Crime Agency (NCA).

The newspaper also said the Serious Fraud Office (SFO) investigated Mr Zahawi’s financial affairs.

But in a statement released on Sunday, the senior Cabinet minister dismissed the allegations as “smears”.

He said: “There have been news stories over the last few days which are inaccurate, unfair and are clearly smears. It’s very sad that such smears should be circulated and sadder still that they have been published.

“These smears have falsely claimed that the Serious Fraud Office, the National Crime Agency, and HMRC are looking into me. Let me be absolutely clear. I am not aware of this. I have not been told that this is the case.

“I’ve always declared my financial interests and paid my taxes in the UK. If there are questions, of course, I will answer any questions HMRC has of me.”

Mr Zahawi said he will “go further” to reassure colleagues and the wider public, by making a commitment that if he is made prime minister he will publish his tax return annually.

Addressing “other smears”, he said: “There have been claims I benefit from an offshore trust. Again let me be clear, I do not benefit from an offshore trust. Nor does my wife. We don’t benefit at all from that.”

The Chancellor said he had never held non-domiciled status, nor has his wife, and she has never used offshore status or a company to avoid tax.

“I have never used offshore companies or services firms based in tax havens for the purchase of property or properties in the UK,” he added.

“I have only been resident of one country since arriving in the UK as an 11-year-old. I have never sought tax status in any country other than the UK, not America or anywhere else.

“I’ve answered these supposed allegations because I think the right thing to do is to be transparent. I have corrected the record. I trust these smears will now be seen for exactly what they are.”

Mr Zahawi is believed to be one of the richest politicians in the House of Commons, and helped found polling company YouGov.

He said: “I do not apologise for being a successful businessman. I am the beneficiary of the British dream and I know that.

“I have done well by investing in the UK and I think that’s something which should be celebrated. I want everybody to have the opportunity to be successful.”