[GJM] [Intertax] The Guardian - the tax haven that today's super rich City commuters call home

[robert searle]

--- christensen tjn <christensen.tjn at neweconomics.org>
wrote:

> The tax haven that today's super rich City commuters
> call home 
> 
> Monaco's rules from the steamship age allow UK
> entrepreneurs to enjoy financial advantages of the
> Riviera 
> 
> David Leigh
> Monday July 10, 2006
> The Guardian <http://www.guardian.co.uk/>  
> 
>  Monaco harbour. Photograph: David
>
Levene<http://image.guardian.co.uk/sys-images/Guardian/Pix/pictures/2006/07/10/monaco372ready.jpg>
> 
> Monaco harbour. Photograph: David Levene
>  
> 
> 
> A new generation of Britain's super-rich are moving
> to the Riviera to avoid the Inland Revenue, largely
> thanks to tax loopholes which allow them to commute
> to work from Monaco. Such well-known residents as
> the recently-knighted retailer Philip Green and the
> Easyjet founder Stelios Haji-Ioannou have been
> joined in this tax haven by a new class of
> astonishingly-wealthy hedge fund managers, property
> developers and internet entrepreneurs. 
> 
> The Guardian has traced more than 650 directors of
> British companies who give their current address as
> Monaco, and the top 10 residents there with UK
> interests alone control family assets worth more
> than £13.5bn. 
> 
> "It's very commutable. It's as easy as living in
> Birmingham and working in London," says Roger Munns,
> who sells £3m-plus apartments to those referred to
> in the City as "the Monaco boys". 
> 
> His sales territory is a corner of the principality
> reclaimed from the sea at Fontvieille, where new
> apartments are christened with reassuringly English
> estate-agents' nomenclature. The Maseratis and
> Mercedes convertibles cruise by blocks called
> "Seaside Plaza", while the rows of London-based
> yachts in the small harbour have names which tell
> their own story of modern English attitudes -
> "Sledge Hammer" and "New Flash". 
> 
> Around the corner is the Columbus hotel, UK-owned,
> where visiting Britons sit in the bar discussing
> property prices, personal tax accountants and the
> relative merits of Monaco schools for their children
> versus those in the rival tax haven of Guernsey.
> Most of the snatches of mobile phone conversations
> overheard on the streets of Fontvieille are in
> English 
> 
> One of Seaside Plaza's key attractions is that it is
> next to the heliport, where helicopters shuttle
> British businessmen along the coast to Nice airport
> in a mere seven minutes. 
> 
> The crucial tax loophole, dating from the steamship
> age, allows non-residents 90 days a year in Britain,
> plus the day of travel out and the day of travel
> back. This means businessmen can fly in on Monday
> morning, work four days, fly out on Thursday night,
> and do this for most weeks in the year without
> breaking the rules. 
> 
> One of those involved says: "You can even fly in one
> day and out the next, and it doesn't count at all,
> provided you don't do it too often." 
> 
> The tax authorities have also allowed non-residents,
> since 1993, to keep a UK house without losing their
> status. Coupled with the laptop and a mobile phone,
> this makes it easy to run a British business from
> Monaco. 
> 
> Traditionally, elderly Britons used to sell up their
> firms and retire to Monte Carlo with the proceeds,
> which were free of capital gains tax in return for a
> minimum of five years residence spent playing golf
> and lazing in the sun. Many still do this. 
> 
> But now they are being joined by the thirty- and
> forty-somethings who treat the crowded principality
> more as a British suburb. There is zero income tax
> to pay on their dividends, and the Sûreté Publique
> will hand out a residence permit in return for
> evidence of a hefty deposit in a Monaco bank, and a
> willingness to pay sky-high prices for property. 
> 
> "In the 90s, it was the Russians who turned up here
> with millions in suitcases", Mr Munns says, "but now
> the British have taken over. Many are high earners
> in the City and, of course, it is an attraction that
> their money is perfectly legitimate." He estimates
> that up to 40% of the current inquiries to
> YourMonaco.com, his online agency, are from Britain.
> 
> 
> One of the City's richest Monaco commuters is Peter
> Cruddas (worth £864m), the son of a Smithfield meat
> porter and founder of internet financial traders
> CMC. His £10m apartment on the Avenue de Spélugues
> is one of Monte Carlo's swankiest addresses, just by
> the famous casino. 
> 
> It only takes him one hour and 40 minutes to fly to
> London's City airport in his Cessna Citation. 
> 
> "I don't want to give the impression I don't work
> hard. I never stop," he says. Mr Cruddas pays some
> tax on his UK income, but at a lower rate overall,
> and does not regard himself as a tax exile. 
> 
> Another Monaco commuter is John Hargreaves, (worth
> £650m), the founder of the discount clothes chain
> Matalan, whose private plane regularly flies him to
> the company's Skelmersdale headquarters, via
> Blackpool airport. 
> 
> Alongside his Dassault Falcon on the Nice tarmac can
> be seen the Gulfstream G550 of Philip Green (whose
> family is worth £4.9bn), and a host of other private
> jets. Sir Philip's enormous yacht, Lionheart,
> dominates Monaco's main waterfront at Port Hercule,
> tied up alongside the almost equally large Lady
> Beatrice, belonging to the semi-retired Barclay
> brothers, owners of the Daily Telegraph (family
> trusts worth £1.8bn). Directly overlooking the
> waterfront is the Shangri-La apartment of the
> Easyjet founder Sir Stelios, (£727m). Nearby is the
> residence of the big Tory party donor and conference
> company tycoon Irvine Laidlaw (£714m). 
> 
> The tax arrangements are sometimes complex. Lord
> Laidlaw is reported to have ceased claiming tax
> exile status since receiving a peerage in 2004. Sir
> Philip does not claim non-residency, but receives
> his dividends via his Monaco tax-resident wife Tina.
> Sir Stelios is of Greek-Cypriot origin, and
> therefore has privileged "non-domicile" as well as
> "non-resident" tax status. He says: "I have no UK
> income to be taxed in the UK." 
> 
> Last week, the former formula one racing champion
> and businessman Jody Scheckter (£100m) was on his
> 2,500-acre Hampshire farm, Laverstoke Park, selling
> buffalo milk ice-cream and lecturing visitors on the
> virtues of organic husbandry. He is tax-resident in
> Monaco. 
> 
> His farm partnership is run with a Fontvieille
> resident, Jonathan Dudman, financial manager for the
> Monaco-registered IMG, which represents many
> international sportsmen. (Another Dudman client is
> Sven-Goran Eriksson, for whom he has set up a Monaco
> company for his international earnings). The Leeds
> United chairman Ken Bates (£15m) also resides in
> Monaco. 
> 
> Another of Dudman's Fontvieille neighbours is the
> racing driver David Coulthard, who says tax is only
> part of his reason for living there, along with ease
> of international travel. He owns the Columbus hotel
> with a Glasgow hotelier and Seaside Plaza resident
> Ken McCulloch (£45m). In the next block is another
> British hotelier, the Tory party donor Firoz Kassam
> (£250m), who made his fortune from housing benefit
> claimants and asylum seekers. 
> 
> Colourful figures who commute from Monaco include
> the Candy Brothers, Nicholas and Christian, who paid
> themselves £8m in dividends last year from
> developing luxury London flat interiors for Russian
> oligarchs. They are now under investigation by HM
> Revenue and Customs over capital allowance claims. 
> 
> The financier Andrew Regan was threatened with
> extradition from Monaco before voluntarily returning
> to stand trial over claims of bribery in his
> attempted takeover of the Co-op. He was aquitted and
> subsequently went into business with the former
> Mercury Asset Fund manager Matthew Tawse, another
> resident of the palm-lined Avenue Princess Grace,
> overlooking the plages. Mr Tawse is a friend of
> Nigel Robertson,(£50m), founder of the internet
> information service Scoot.com, who lives in an
> adjoining block. 
> 
> Jon Wood, a £20m-a-year UBS trader, is now planning
> Monaco's first hedge fund, SRM Global this autumn.
> He was criticised by Mr Justice Warren over a
> business dispute as a "very hard and calculating
> man". 
> 
> Other financiers arriving in Monaco include Jim
> McColl 
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