Israel’s wealthiest man is moving to London amid a row in the Jewish state over plans to squeeze more taxes out of the rich.
Idan Ofer, who is reported to be worth some $6.5bn, will join the increasing number expats in the capital who enjoy substantially lower charges on their wealth than they pay at home. The move is also likely to reignite a row over the lowering last week of the top rate of income tax.
Mr Ofer, a magnate whose business interests span energy, shipping and transport, is the head of Quantum Pacific Group which holds the Ofer family stake in Israel Corporation, the largest public holding company on the Tel Aviv stock exchange. Like his similarly wealthy older brother, Eyal, Idan Ofer inherited his business acumen – and much of his wealth - from his father, Sammy, one of Israel’s most successful businessmen who died a couple of years ago.
The reasons for Mr Ofer’s decision to leave for what is likely to be one of London’s more leafy areas are multi-fold. Those close to the businessman point out that his mother lives in the capital and that his interests are international, but do not deny that Israel’s changing tax regime was a factor in the decision. Similarly, one of his sons, who has recently completed his Israeli national service is considering continuing his education in London.
‘Friends’ of the billionaire told the Financial Times that, “there are a number of family reasons which mean it makes sense for him to spend more time in London than he has previously and make that more of a base.”
The Israeli economy, which has been firing on all cylinders while others have been hit by the credit crunch in recent years, has itself shown recent signs of running out of steam. Street protests in Tel Aviv – including one where a man set himself alight – have demanded the cost of living for ordinary Israelis be reduced.
Israel’s new government – largely elected with a mandate to stem the burden on the middle classes – is expected to announce tax hikes soon. According to an editorial in the left-leaning Haaretz newspaper last week, finance ministry experts are working out ways to raise an extra NIS 4bn, which would include hikes in corporation, income and capital gains tax as well as VAT.
Indeed, Mr Ofer himself became part of the election campaign when current opposition leader Shelly Yachimovich singled him out for particular criticism as a way of appealing to the middle classes. The ire focussed on Mr Ofer was perhaps slightly unfair, given that his brother has been a resident of Monaco for some time.
Finance Ministry officials, as well as those at the Israel tax authority, declined to comment on their plans, or on Mr Ofer’s decision to leave. At some level, Mr Ofer’s decision to leave will raise concerns among officials that tax hikes will drive away the rich, along with their cash.
Given his wealth – and the UK’s open arms approach to the super-rich – it is not hard to see why Mr Ofer is London bound. Fiscal reasons aside however, he already has close links to Britain through his father, who was awarded a honorary KBE for his work – and money – in helping to restore and promote the UK’s maritime heritage. The elder Mr Ofer handed over £20m to London’s National Maritime Museum in 2008, as part of the Greenwich museum’s £35m overhaul. Two years later, he contributed another £3.3m to help restore the fire damaged Cutty Sark.