Russian-Israeli billionaire Roman Abramovich has lost a legal battle against French fiscal authorities after they ruled he undervalued his €100 million (£87m) Riviera retreat – once a summer idyll for the Duke and Duchess of Windsor – to pay less tax.
For the world’s 140th richest man worth $11.8 billion (£9bn), according to Forbes, it may sound petty to quibble over a €1.2m tax bill.
But Mr Abramovich has been fighting for years to reduce his wealth tax on the Château de la Croë, a vast villa on the exclusive Cap d’Antibes peninsula in the south of France known as Billionaires’ Bay. It is just one of a string of palatial residences he owns around the world, along with Eclipse, his 533-foot yacht and the world’s second-largest, which he bought for nearly $400 million in 2010.
The ruling comes after a string of setbacks for the 51-year old owner of Chelsea Football Club. In May, the Russian oligarch was ran into problems renewing his visa from the UK Home Office to live in England. He suffered a further blow last month when Switzerland turned down a residency request after police warned of "links to money laundering and organised crime" – an allegation he vehemently denies.
Mr Abramovich bought the Château de la Croë in 2001 for an undisclosed sum, pumping around €180 million into transforming the abandoned and dilapidated Victorian-style white house into an Uber-luxurious holiday home on the Côte d’Azur for family and friends.
Alastair Grant/AP
French authorities have concluded, however, that he had undervalued the holiday home and thus had not paid enough wealth tax in 2006 and 2007. Inspectors valued the property at around €41,000 per square metre by comparing it to the sale price of similarly prestigious properties in the vicinity at that time – roughly double the amount he estimated it was worth.
After a protracted legal battle, including most recently a complaint that the new tax paperwork wasn’t delivered to him personally, his arguments were rejected on September 26 by France’s top court, the Court of Cassation.
Mr Abramovich’s lawyers argued that French tax authorities had seriously overvalued the chateau by comparing the Antibes-based property to others sold around the time in what they argued were the more expensive areas of Saint-Jean-Cap-Ferrat and Cap d’Ail.
These included Villa Fiorentina, a former retreat for the Kennedys, Elizabeth Taylor and Greta Garbo. In late 2004, it sold for over €73 million, value added tax included.
But the court ruled that it was indeed “pertinent to compare Cap d’Antibes to Cap Ferrat, which are both remarkable sites benefitting from an attractiveness on a global scale and reserved to a wealthy few”.
Perched alone at the tip of the Cap d’Antibes with a panoramic sea view, Mr Abramovich’s property spans more than 75,000 square metres (18.5 acres) with vast gardens, circular ponds and a living area of over 2,400 square metres in the chateau and a guest pavilion.
VALERY HACHE/AFP
It has a swimming poll on the roof out of paparazzi view, as well as a 400 square-metre “ecological” pool in the gardens fed by a waterfall and surrounded by water lilies. A gym and cinema are installed in the basement, and the oligarch has even had a 100m tunnel built to reach his underground gym incognito.
The latest ruling comes a year after the Paris court of appeal dismissed similar arguments by citing an architect report from 2005 that hails the chateau as the jewel in the crown of the Riviera. “This property is certainly the most beautiful on the Côte d’Azur between Saint-Raphael and Italy,” the expert report read. “It may not be the largest, but no other has this level of luxury and elegance.”
Mr Abramovich had also complained that the French taxmen had failed to factor in the money he spent on renovating the property, including a €30 million injection in 2005. The authorities quashed this too, saying they had already factored into their price per square metre a 40 per cent rebate for 2005 and a 30 per cent rebate for 2006.
Built in 1927 for the English aristocrat and newspaper magnate Sir William Pomeroy Burton, the chateau has been the residence of several crowned heads.
The former King Edward VIII leased the property a year after he controversially abdicated in 1936 to marry American socialite Wallis Simpson, throwing huge parties there.
Sir Winston Churchill and his wife Clementine celebrated their fortieth wedding anniversary with the Windsors at the château in 1948 and King Leopold III of Belgium, the last Queen of Italy, and Farouk I of Egypt also lived there.
In the 1950s, it was bought by billionaire Greek shipping tycoon Aristotle Onassis and later by his lifelong rival Stavros Niarchos. It was partially gutted in a fire in the 1970s and had remained abandoned for decades until it was aquired by Mr Abramovich.
Contacted by the Telegraph, his spokesman John Mann declined to comment.
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