New York (HedgeCo.Net) – Following President Francois Hollande’s pledge to raise a top income tax rate of 75% last year, a number of ultra wealthy individuals have already reportedly exited the country to more liberal tax regimes, according to a new whitepaper by ultra-high net-worth tracking firm Wealth-X.
From a French VAT viewpoint, hedge fund management companies are taxable in the same way as the French asset managers. If the management of a hedge fund is carried out through a corporate structure rather than as individuals, the manager will be subject to the usual French corporate tax rate of 33.33% on its taxable profits.
Some people leaving the country include top model Laetitia Casta, who left France for London, celebrity chef and restaurateur Alain Ducasse, who now lives in Monaco, and actor Gerard Depardieu, who was granted Russian citizenship earlier this year. French actors Johnny Hallyday and Alain Delon have both reportedly jumped ship to Switzerland to escape the threat of high taxes. Others, including Bernard Arnault, France’s wealthiest man, and music producer Jean Michel Jarre are said to be considering leaving.
France is home to 4, 305 ultra high net worth (UHNW) individuals with total assets of $530 billion. If just 10% of this population leaves, it could signify a loss of $1.4 billion a year at the top tax rate, according to Wealth-X.
“If a heavy top tax burden is implemented, France may see an exodus of its wealthiest individuals, resulting in billions moving offshore,” said Wealth-X CEO Mykolas D. Rambus.
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