Ultra-rich deserting London for tax breaks of Paris

PARIS has overtaken London in a global league table of the world’s ultra-rich as probusiness Emmanuel Macron’s tax breaks and a stronger economy have lured them to the French capital.

Under the French president’s predecessor, all the talk was of the rich leaving Paris and France to escape socialist François Hollande’s 75 per cent tax on millionaires. It prompted David Cameron, then the UK’S prime minister, to pledge to roll out the “red carpet” to high earners.

But the tide has turned, according to a survey by Wealth-x, on where the 256,000 “ultra high net worth” (UHNW) individuals worldwide worth at least $30 million (£23 million) choose to live.

The annual study saw Paris beat London for the first time since its inception six years ago, to take the European crown as the world’s fifth ranked city with the most ultra-rich inhabitants.

“While hampered in part by Brexit-related uncertainty ... the UK capital lost ground mainly as a result of above-average growth of almost 17.7 per cent in the ultra-wealthy population of Paris,” found the report, which said these now numbered more than 3,900. “This easily surpassed the 10.1 per cent rise in London,” it said.

In another turnaround at the top of the table, New York lost pole position to Hong Kong, with the former British colony seeing its number of ultra-wealthy increase 31 per cent last year, to about 10,000. Tokyo came third and Los Angeles fourth.

Countrywide, France finished two places above the UK, in sixth position, with Britain the only country in the global top 10 to lose ground in the rankings, at eighth place. Germany was by far Europe’s top country for the uber-rich but Berlin failed to make the top 10 city rankings because Germany’s wealth was “far more evenly dispersed across its major cities”, said the report.

Dubbed by critics “the president of the rich”, Mr Macron has introduced a raft of tax reforms in a bid to dispel France’s reputation as a country that soaks the rich and stifles enterprise.

Last year, he scrapped its contentious wealth tax on everything except property assets – in effect cutting the tax by 70 per cent.

In January, he introduced a 30 per cent flat tax rate on capital gains, dividends and interests – a long-standing demand from investors and entrepreneurs – and removed the top marginal band of payroll tax.

“He has effectively halved the tax paid by the very wealthy,” said Etienne Lefebvre, editor of financial daily Les Echos, who said Paris had been “doing a belly dance to attract wealthy Londoners to Paris” ahead of Brexit.

Corinne Dadi, a tax lawyer with Stehlin, said the findings tallied with what she had seen in recent months. “There is renewed interest in Paris... Since Macron’s arrival, for the first time in 15 years, I am organising returns here,” she said.

Ms Dadi said that almost all those wishing to leave London cited “Brexit plus a huge fear of Jeremy Corbyn”.