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Wealth creation


Swiss rich just keep on getting richer


By Matthew Allen


The wealthiest man in Switzerland: IKEA president Ingvar Kamprad (AFP)

The wealthiest man in Switzerland: IKEA president Ingvar Kamprad

(AFP)

The 300 richest people in Switzerland added another SFr31 billion ($33 billion) to their wealth this year, bringing the total pot to SFr512 billion despite the ongoing economic downturn in Europe.

Ikea founder Ingvar Kamprad remained top of the rich list compiled by the Bilanz business magazine, with an estimated fortune of SFr38-39 billion. But his SFr3 billion growth in wealth paled in comparison with brewery investor Jorge Lemann, whose fortune doubled to SFr18 billion.

Bilanz put the 6.5 per cent growth in collective wealth mainly down to the revival in global stock markets so far this year.

While the list contains many “home grown” multi-millionaires and billionaires, the attractive tax regime in many Swiss cantons has attracted people who made their fortunes overseas.

Swedish entrepreneur Kamprad made his home in canton Vaud many years ago while Lemann, born in Brazil to Swiss immigrant parents, now lives in Zurich.

Backlash

Some 5,445 people benefited from preferential tax treatment in Switzerland in 2010, according to official figures. Under the so-called lump sum tax system, individuals are taxed on their cost of living rather than income or wealth.

Despite the government proposing to tighten up the rules on lump sum tax, the Swiss people will soon vote on whether to scrap the controversial system that is seen by some to unfairly favour the ultra-rich.

Residents of canton Zurich decided already in 2009 to abolish such special favours, a vote that has been followed in four other cantons. Initiatives are pending in more cantons, while others have put off a vote by demanding more from lump sum tax beneficiaries.

And it is not only today’s wealthy who may be forced to pay more to the tax authorities. Another initiative in the pipeline threatens to make future generations pay a bigger slice in inheritance tax.

At the same time, the French authorities are pressuring Switzerland to renegotiate an existing inheritance tax accord between the two countries that could coax a few more millions out of some Swiss-based millionaires.

And some losers…

In the meantime, the wealthy have on the whole seen their pot of spending money expand, according to Bilanz research.

The total pool of money owned by the 300 wealthiest Swiss individuals - or families – has yet to reach the record level of  SFr529 billion seen in 2007, just before the financial crisis.

And not everyone enjoyed the best of years in 2011. Commodities moguls Willy Strothotte and Ivan Glasenberg had to endure a loss of SFr1.75 billion and SFr1 billion respectively on their fortunes.

Both Glencore men saw their money go down the drain after shares plummeted shortly after the company was publicly listed. However, they remain multi-billionaires despite being the biggest losers of last year, according to Bilanz.

Reasons to be envious

Ingvar Kamprad  remained at the pinnacle of the Bilanz 300 richest Swiss list this year with a wallet bulging to the tune of SFr38-39 billion.

Jorge Lemann’s extensive Brazilian investments are worth SFr17-18 billion.

Next comes the Hoffmann & Oeri pharmaceutical family with SFr16-17 billion.

Russian industrial tycoon Viktor Vekselberg weighs in with SFr14-15 billion.

The wealthiest individual woman is investor Traudl Engelhorn with a mere SFr2-3 billion.

Everyone is wealthy!

The Swiss population remains, on average, the wealthiest on the planet, according to data released by Credit Suisse last month.

Despite a 13% drop in individual wealth from last year, the average pot of savings per head in Switzerland is still comfortably above the nearest competitor, at $468,000.

The following countries made the top ten for average individual wealth in the 2012 Credit Suisse Global Wealth Report. The study measured global wealth between July 1, 2011 and June 30, 2012.
 
1. Switzerland: $468,186 per person
2. Australia: $354,986 per person
3. Norway: 325,989 per person 

4. Luxembourg: $277,119 per person
5. Japan: $269,708 per person
6. France: $265,463 per person
7. US: $262,351 per person
8. Singapore: $258,117 per person
9. Britain: $250,005 per person
10.  Sweden: $237,297 per person

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