The UK’s wealth advisory profession is braced for a continued influx of high net worth French people fleeing higher taxes on income and wealth from the new Hollande regime, but it is an open question as to how dramatic such a move of people and money will be.
For many years, central London has hosted a large expat French population, often composed of finance industry professionals and their spouses, as well as French students defying the indifferent British weather to study English. According to whichever studies can be believed, there are up to 400,000 French citizens living in London – a factor pushing residential prices to vertiginous levels in areas such as South Kensington. This influx has made London the sixth largest “French” city.
The question, though, is how much fresh business is entering the capital due to the top 75 per cent tax rate on annual incomes over €1 million (around $1.31 million). A number of large European banks contacted by WealthBriefing pointedly declined to comment on the record or claimed that nothing unusual was going on in terms of inflows. The legal profession has been rather more voluble, however.
“We’re seeing a lot of interest; in fact we’ve seen three French clients in the last few weeks. And they say to us, 'There is no way we’re going back while we have these big tax hikes',” Alex Ruffel, partner at Berkeley Law, told this publication.
Her firm specialises in advising ultra high net worth clients on issues of domicile and residency in the UK, an area of business that has grown steadily in recent years with enquiries from the Middle East, the former Soviet Union, and parts of Europe. And now French people are knocking on Britain’s door.
“These people are not just expat returnees [to the UK]. They tend to be in areas such as banking, medicine and the law. They still see our property market as quite attractive,” Ruffel said. “What’s more, they are not just coming here for two years…but maybe five, 10 or possibly more years,” she said.