Angry Tracey Emin faces taxing questions
She plans to flee Brown’s new tax. But is she clear about France’s wealth tax?
Tracey Emin's knowledge of France's tax laws appears to be in better order than the unmade bed that made her famous. The 46-year-old pioneer of the Brit Art movement told the Sunday Times she is considering a move to France to escape Labour's 50 per cent tax rate on incomes exceeding £150,000, due to be introduced in April. "I'm simply not willing to pay tax at 50 per cent," she said, adding that "the French have lower tax rates and they appreciate arts and culture."
How times have changed. It wasn't so long ago that France had one of Europe's most swingeing tax regimes.
When Nicolas Sarkozy came to power in 2007, an estimated 500,000 Frenchmen and women were living abroad to avoid paying the high levels of tax, the most famous fugitives being singer Johnny Hallyday and tennis star Amelie Mauresmo.
Since then, Sarkozy has slashed the maximum income tax bracket to 40 per cent (for those earning more than €69,505 a year), although French residents must also pay three social taxes. However, there are a range of generous tax deductions available - on the cost of hiring a babysitter, for instance, or insulating one's property - and artists can benefit from these deductions.
When Hallyday quit France in December 2006 it was with regret and he expressed his desire to return should the levels of tax diminish. Sarkozy sympathised with Hallyday's predicament, telling the press "so many of our artists, our creators, our researchers... tell themselves that they have to leave... I would like people to think that they can live in France even when they succeed."
This suggested Sarkozy was drawing up plans to reduce not just the rate of income tax but also the 'L'impot sur la fortune' - or wealth tax - first introduced in the 1980s by Socialist president Francois Mitterrand and which reputedly swells the coffers of the French treasury by £3.5bn every year. Perhaps he was - until last year's economic crash.
Since then Sarkozy has been more eager to distance himself from his coterie of super-rich friends, associations that earned him the nickname in the left-wing French press of 'President bling-bling'. So, for the time being, the wealth tax stays.
And here's the problem for Tracey Emin and anyone else thinking of escaping to France. If you choose to live in France, the wealth tax is payable annually at 0.55 per cent on your worldwide assets above €790,000 and below €1.25m. So, just a decent house in the south of France and a small portfolio of shares or pension rights is enough to make you 'wealthy' in France.
And it gets worse. There are incremental rises in the wealth tax, with those classed as super-rich - holding worldwide assets above €16.5m - forced to pay an annual 1.8 per cent.
If Emin really wants to benefit from low taxes perhaps she should follow in the footsteps of other British artists such as John Copnall and James Lawrence Isherwood, and move to Spain where a tax decree popularly known as the 'Beckham Law' allows foreigners to pay only 24 per cent income tax instead of the 43 per cent that Spaniards in the same income bracket have to stump up.
The law, named after England footballer David Beckham because he was one of the first people to prosper from it, was passed by the Spanish government four years ago to encourage foreign workers to settle in the country.
Instead of being taxed on worldwide assets, the individual is liable to taxation only on Spanish income. There is one stipulation, however, and that is that the foreigner must have come to Spain on a contract with a Spanish company or entity. With Real Madrid always on the look-out for talent, perhaps Emin should apply for job of official team artist. ·
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