Abramovich loses £1m tax battle over French chateau

Russian oligarch adjudged to have undervalued luxury villa that was home to Duke of Windsor and Onassis

ROMAN ABRAMOVICH has lost a legal battle against French tax authorities after they ruled he undervalued his €100 million (£87 million) Riviera retreat – once a summer idyll for the Duke and Duchess of Windsor. It may sound petty for the world’s 140th richest man, worth $11.8billion (£9billion) according to Forbes, to quibble over a £1million tax bill, but Mr Abramovich had been fighting for years to reduce his wealth tax on the Château de la Croë, a vast villa on the exclusive Cap d’antibes peninsula in the south of France known as Billionaires’ Bay.

The ruling comes after a string of setbacks for the 51-year-old owner of Chelsea Football Club. The Russian oligarch reportedly had visa issues in the UK. He also suffered a further blow last month when Switzerland released papers on his residency request which revealed police warnings of “links to money laundering and organised crime” – an allegation he vehemently denies.

Mr Abramovich, who was granted Israeli citizenship earlier this year after his British visa was delayed, bought the Château de la Croë in 2001 for an undisclosed sum, pumping around €180million into transforming the abandoned and dilapidated Victorian-style house, which was built in 1927, into a luxurious holiday home. The property spans more than 75,000 square metres (18.5 acres) with vast gardens, circular ponds and a living area of over 2,400 sq m in the chateau and a guest pavilion.

French authorities have concluded, however, that he had undervalued the holiday home and thus had not paid enough wealth tax in 2006 and 2007.

Inspectors valued the property at around €41,000 per square metre by comparing it to the sale price of similarly prestigious properties in the vicinity at that time – roughly double the amount he estimated it was worth.

After a protracted legal battle, his arguments that French authorities had seriously overvalued the chateau by comparing the property to others sold around the time, and that they had failed to factor in the money he spent on renovating the property, were rejected on September 26 by France’s top court, the Court of Cassation.

The Duke of Windsor, the former King Edward VIII, leased the property a year after he abdicated in 1936 to marry Wallis Simpson, the divorced American socialite. Sir Winston Churchill and his wife Clementine celebrated their 40th wedding anniversary with the Windsors at the chateau in 1948.

In the Fifties, it was bought by Aristotle Onassis, the billionaire Greek shipping tycoon, and later by Stavros Niarchos, his lifelong rival. It was partially gutted by fire in the Seventies and had remained abandoned for decades.

Mr Abramovich’s spokesman declined to comment when contacted by The Daily Telegraph.