Britain, a haven for super-rich

April 30, 2007

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LONDON, April 29: Britain has become a haven for the international super-rich as they keep pouring in to avoid high taxes in their own countries and for the social circles and security, according to The Sunday Times Rich List, published on Sunday.

The number of billionaires living in Britain has surged to 68, up from 54 last year. About a third are from overseas and only three of the wealthiest 10 billionaires were born here.

The wealth of the richest 1,000 people in Britain has more than trebled in the decade since Tony Blair came to power promising greater fairness.

The 260 per cent rise in the wealth of Britain’s richest contrasts with a 120 per cent average wealth increase for the population as a whole. Britons have benefited from the booming housing market but, unlike the super-rich, have done less well with their financial investments.

The richest are Lakshmi Mittal, the Indian-born steel magnate now worth £19.25 billion, and Roman Abramovich, the Russian oil tycoon valued at £10.8 billion.

Complex rules on residency and domicile status mean the super-rich from overseas can, as one accountancy expert put it, “avoid paying virtually any tax in Britain apart from council tax”. Beresford added: “There’s the cluster effect. Russians have followed Abramovich, Indians are following the Mittals and Swedes are following the Rausings.”

The richest Briton is the Duke of Westminster, whose property holdings keep rising in value.

He is worth seven billion pounds. Next come Sir Philip and Lady Green, owners of Bhs, Topshop and other retail chains, who are worth £4.9 billion. They are based in Monaco.

More than half of the buyers of homes in the capital costing more than two million pounds come from overseas, according to Knight Frank, the estate agent. However, many insist the mix of foreign incomers with home-grown entrepreneurial flair has been good for Britain. Mike Warburton, a tax expert with Grant Thornton, the accountancy firm, said: “In many ways we are a tax haven for nationals from overseas. But there is no doubt the UK has benefited enormously.

“It has attracted talent, wealth and enterprise. It has made London the financial centre of the world. The super-rich from overseas can quite legitimately avoid tax — but it doesn’t mean they don’t spend.”

The most surprising entries in the top 10 are David Khalili, an Iranian Jew, and Jim Ratcliffe, a little-known British deal maker who has built the third-largest chemical company in the world.

Khalili, 61, is based in London but was born in Iran. After national service he completed his education in America where he was fascinated by the great art collections. He began buying undervalued Islamic art, Spanish metalwork and Indian textiles. His collections may be worth £4.5 billion and with other assets, including property, he is valued at £5.8 billion.

Khalili said that he wanted to exhibit his art to promote inter-faith understanding.

Ratcliffe has risen almost without trace to become Britain’s 10th richest person. A former venture capitalist, he has made a £3.3 billion fortune by snapping up undervalued chemical companies. In 1998 he was 880th in the rich list with a mere £20m.

His Ineos group now employs more than 15,000 people in 14 countries. Ratcliffe guards his privacy and last week declined to answer questions about his own life. “He’s a very personal man,” said a spokesman.