In a move likely to be eagerly monitored by wealth planners helping French high net worth individuals leave the country, the French top court has ruled that the government’s recently enacted top tax rate of 75 per cent is unconstitutional. However, French president Francois Hollande has vowed to push ahead with heavier taxes on the country's top earners.

The tax rate, cited as a reason why HNW individuals – such as renowned actor Gérard Depardieu – are leaving France, is unconstitutional because it does not guarantee taxpayer equality, media reports said.

The top rate has caused controversy because the measure, passed by the socialist government of Hollande, has been blamed for prompting entrepreneurs and other wealthy individuals into leaving the country. In places such as the UK, where the top rate is due to fall to 45 per cent in April from 50 per cent, wealth advisors have told this publication that thousands of French people are seeking to enter the country. The measure, coupled with other reasons for French emigration, has, for example, reportedly caused a shortage of school places for French youngsters in London; it has also helped fuel high property prices in parts of London. The UK capital is now holds the sixth-largest concentration of French nationals.

The court reportedly said Hollande’s plan would have added extra levies of 18 per cent on individuals’ incomes of more than €1 million ($1.32 million), while regular income taxes and a 4 per cent exceptional contribution for high earners would have been based on household income.

Two households having the same total revenue could end up paying different rates depending on how earnings are divided, violating the requirement for equal tax treatment, the court said.

Despite the court's ruling, Hollande has vowed to implement a top tax rate, media reports said. 

Hollande says he still plans to raise the top rate of income tax. In a national address on New Year's Eve, he said the law would be redesigned, adding, "we will still ask more of those who have the most"; notably, however, he did not mention the 75 per cent figure, prompting speculation that the move would be watered down.