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Southern France tax haven attracts Brits

10th October 2006 | back to article listings BACK    print this article PRINT

The south of France is becoming a haven for over-taxed top earners in the UK, according to latest reports.

Living in Monaco has long since been a respite for the rich and famous but it has become apparent that the demand for property in this exclusive region has increased dramatically of late due to the continuing strength of the UK economy.

In July, the Guardian found that more than 650 directors of British companies give their current address as Monaco and that the top ten residents in the principality with only UK interests control assets worth over 13.5 billion.

Non residents are allowed to spend 90 days in the country but a legal loophole means that days of travel are not counted, reported the same news provider. This means that, with the help of a laptop, a mobile phone and a private jet, top businessmen can easily work a three or four-day week in their UK offices.

However, the trend of Britain's richest heading abroad has hit new heights of late with some estate agents in the Alpine principality claiming that four in ten of their customers are now from the UK, compared with the historical average of ten per cent, according to Tribune Properties.

It is believed that this growing demand is due as much to the increase in the number of millionaires in the country as to the perception that the UK is over burdened with tax. The increase in stealth taxes under Gordon Brown's stewardship of the treasury and the well-documented troubles that middle class families are having with inheritance tax (IHT) have caused many to choose to abandon life in the UK in favour of the French Riviera.

Research released yesterday (October 9th) by the Stroud & Swindon Building Society showed that the average house could be liable for IHT in eight years' time enforced these concerns over the amount of tax Britons are forced to pay.

A spokesperson for information provider said: "Despite the top rate of tax coming down to 40 per cent, by the time other direct taxes such as national insurance are taken into account, around half of the top earners' salaries are as many of the Monaco property buyers from Britain see it being lost to the inland revenue.

They concluded: "By moving to Monaco they effectively double their disposable income."

However, outside of Monaco also offers relief from the overburdened UK. Assetz stated, in response to the country's new tax laws in 2004: "The popular perception of France as a high tax country is out of touch with reality. In many cases France is a lower taxing country than the UK and from a tax point of view an attractive place in which to invest in property."

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