The new elected French president unveiled a plan to impose a one-off levy on people whose net wealth is higher than €1.3m year, as part of a €7.2bn tax package.

The French government also announced increases in taxation on inheritance, company dividends, stock options and holiday homes.

The plan is to cut France’s deficit target as a percentage of GDP from 5.2% in 2011 to 4.5% in 2012.

The measure is the first step towards the sharp increase in wealth taxation promised by Hollande during the electoral campaign.

The French president said that by 2013 the marginal rate on annual incomes of more than €1m will be raised to 75%.

If implemented the tax could lead to numerous HNWIs leaving the country.

Neighbouring nations, including Switzerland and the UK, have said they are ready to welcome this outflow of capital.

In February 2012, in a statement addressed to French financial workers, London mayor Boris Johnson said: "Bienvenue à Londres. This is the global capital of finance. It’s on your doorstep and if your own President does not want the jobs, the opportunities and the economic growth that you generate, we do."



Source: Private Banker International