The latest figures show that there are 52,900 non-doms registered in London (2019 HMRC data). This is a group that, somewhat curiously, reside in the city but don’t live there (to reduce their tax burden); they are the Schrodinger’s cats of the tax world. For wealthy ‘non-doms’ the city is defined in law as a kind of incomplete home, despite its clearly being their preferred location to live. London non-doms paid £5.3bn in income tax in 2018 (roughly 80 per cent of the total amount paid by all of the UK’s 90,000 non-doms). This sounds like a decent enough contribution until we divide it by the total number of non-doms, which then gives us an average take of £100,000 per head. This may still sound like a lot, but then an average school head teacher earning £55,000 would pay around £16,000 in income tax, while a ‘low’ paid university vice chancellor earning £170,000 would pay a comparable amount of tax (£70,000), this is also equal to the level of pay that a quarter of a million Londoners earn. Since we know little or nothing about the scale of the non-doms’ offshore holdings, it is not possible to estimate how much tax is lost by these arrangements. Many think the UK government’s tax inspectors should do much more. It is also worth remembering that this group does not include the numerous wealthy ‘onshore’ citizens who have used offshore savings and investment funds to evade or reduce their tax bill.
The existence of the non-doms is the source of much heated debate. We know very little about who these people are, with the exception of some well-known individuals – such as Mark Carney, the former Governor of the Bank of England, Roman Abramovich, Lewis Hamilton, Sigrid Rausing, Viscount Rothermere (owner of the Daily Mail who inherited the exemption from his father) and Lakshmi Mittal – many of whom are among the richest in London. The list also includes entrepreneurs like James Caan, private equity and finance managers, resource and retail magnates and numerous CEOs of major global corporations including a string of UK banks and pharmaceutical and insurance companies.
The non-doms have become a serious point of contention since many have lived for years in London and clearly benefit from living here. The non-dom issue highlights rules that are a legacy of empire and landed interests that permeate through to the life of the contemporary city. This is another good example of the many ways in which capital finds all manner of schemes by which its demands to escape the rules placed on the little people are enabled by a compliant state.
The general impression is of a rotten colonial legacy that serves the interests of the rich, who are able to run rings around tax collection agencies. The fear often peddled by some commentators is that imposing a greater tax burden on them might drive away important contributors to the UK economy. Yet it seems unlikely that long-term residents of the alpha city would be put off living there by a levelling of the tax playing field.
It is clear that London retains a powerful hold on the imaginations, wallets and lives of the global super-rich. In this sense there is reason to be confident that fair and transparent tax rules might not see a significant exodus of the city’s rich because they would not be able to access the host of desirable aspects of living there, even if they do so only for part of the year. An obvious dividend of introducing such measures would be the clear message that tax rules applied fairly to all, with the extra revenue used to address problems like the availability of affordable housing in the city.
The new rich of the alpha city are exemplified by wealthy individuals like Evgeny Lebedev (owner of the Evening Standard), Sir Cameron Macintosh (entertainment), Dickson Poon (owner via an investment company of Harvey Nichols), Michael Bloomberg (politics and media), Anthony ‘Yachtie’ Bamford (heavy plant), Anne-Marie Graff (diamonds), Bernard Lewis (retail), Charlene de Carvalho-Heineken (brewing), Ashok Hinduja (steel), Richard Desmond (media), Bernie Ecclestone (sport), Duncan Bannatyne (leisure) and Christian Candy (real estate). Banking and finance also figure prominently. Perhaps the most interesting thing about the lists of London’s wealthiest is the unrecognisability of the bulk of their names – those with enormous wealth are for the most part obscure, anonymous individuals.
Also significant are those who provide opportunistic processing and investment of other people’s money, the fund managers such as Crispin Odey, Ken Griffin (who spent nearly £200m on two homes in London), Michael Platt and John Beckwith among many others. Among this group, proximity to the City is important, but so too is the key hedge fund district of Mayfair, which has long been deemed a more comfortable and sociable base for those working in high-end finance. The idea that proximity is no longer important in finance is inaccurate – personal deal making, face-to-face meetings to build trust, and the soft infrastructure of watering holes and restaurants are also crucial elements here.
Over the last twenty years or so the internationalisation of the city’s wealthy has become increasing evident; this has included groups like the Russians, Turks, Nigerians and Chinese, alongside the longer-term presence of Americans, Hong Kongers, Arabs and the French. Many of the new rich live in the wonderful homes and massive mansions that were built on earlier waves of wealth. They include Lakshmi Mittal, who lives in what is known as the Taj Mittal on Kensington Palace Gardens, Roman Abramovich, Leonard Blavatnik, Alisher Usmanov, China’s richest businessman Wang Jianlin, the Sultan of Brunei, Tamara Ecclestone and John Hunt, who owns the elite estate agency Foxtons. Next to Regent’s Park live the Sultan of Oman, the Prince of Brunei and members of the Saudi royal family, in the enormous ‘lodges’ and terraces created by the Prince Regent’s architect John Nash in the early nineteenth century.
In areas like Highgate and Hampstead many of the mansions built by people who made their fortunes in soap, coal and brewing have been bought by wealthy Russians, who tend to live much more privately than did the patrician but ultimately short-lived wealth dynasties that built the residential landscape on the ridge. Athlone House, which was originally built by a financier, became a care home between 1955 and 2003, when it was sold to the Kuwaiti royal family. It was recently bought for £65m by the head of the private investment company Alfa, Mikhail Fridman, who started out as a construction engineer. Like many homes in the key alphahoods, the property was purchased from offshore. Adjacent to Athlone is Beechwood House – one of at least two residences in and around London belonging to billionaire Alisher Usmanov (metals and mining, a stake in Arsenal, with another home in Surrey at Sutton Place). It was previously owned by members of the Saudi and then Qatari royal families.
Perhaps the key home here is Witanhurst. With its sixty-five rooms it is the second largest home in England after Buckingham Palace, yet still apparently not large enough for Andrei Guriev (fertilisers), who bought the property using a company (Safran Holdings) registered in the British Virgin Islands, and then reportedly expanded the building to include underground car parking and a massive indoor pool and cinema.
London has become a world increasingly made by and for the new rich. Yet few of them are fully or even mostly resident in the city. Today, instead of retreating to a rural pile as their forebears did, they are more likely to be found in other tax-efficient cities, such as Geneva, Dubai or Monaco, or in homelands around the world such as India, the UAE, Pakistan, Nigeria, Lebanon or Israel. While the city’s new rich are a hyper-mobile group who circulate between many places critical to their tastes and needs, many of them still see London as the key place to engage with others in the wealth bloc – building alliances, advancing business opportunities, and drawing on its uplifting arrangements and configurations of people, places and experiences that London alchemically brings together.
If the nineteenth-century bourgeoisie initially struggled to join the ranks of society, their co-opting of and co-presence in the city eventually became a means of bypassing the strategies of class closure or rejection on the part of the ruling elites. Similar processes have occurred in more recent decades. In the 1970s, when London was on its knees, money talked louder than social networks, while snobbery regarding who was part of society faded by necessity, as new entrants like the oil-rich Arabs came to take up residence in areas like Knightsbridge and Mayfair.
The Clermont Club, a gambling house set up by the middle-class entrepreneur John Aspinall, was the setting for what some have identified as the kind of no-rules capitalism that pervaded