Egyptian billionaire Sawiris says ‘Tory incompetence’ forced him to quit UK

Egyptian billionaire Nassef Sawiris has blamed “years of incompetence” by the Conservatives for tax changes that he says have driven him to leave the UK.

Sawiris, who is Egypt’s richest man and co-owner of English football club Aston Villa, told the Financial Times he recently moved his residency from London to Italy and Abu Dhabi, in an interview at his long-standing office overlooking Mayfair’s Berkeley Square that he has since vacated.

He said the decision to move abroad after 15 years of living in the UK was due to a government crackdown on non-domiciled residents announced by the previous Tory administration.

“You can’t blame Labour,” said Sawiris. “This was all in the making for 10 years of incompetence by the most left-leaning Conservative party in history.”

The changes, announced by Conservative chancellor Jeremy Hunt and confirmed last autumn by his Labour replacement Rachel Reeves, ended a tax regime that allowed UK residents who declared their permanent home was elsewhere to avoid paying tax on foreign income and gains.

Sawiris joins a rush of other wealthy individuals who have left or are considering leaving the UK — such as steel tycoon Lakshmi Mittal — following the tax changes, which came into effect on April 6.

Reeves has taken the brunt of criticism over the series of tax rises meant to address the UK’s dire public finances and help her meet so-called fiscal rules in order to avoid spiralling interest rates on government debt.

“I feel bad for her,” Sawiris said about Reeves. “She’s behaving like Margaret Thatcher on fiscal discipline. Otherwise, the UK would have had a 7 per cent interest rate.”

Yet he cautioned that Reeves should be more accommodating to wealthy businesspeople, given their tax contributions could play a key role in funding government services. He added that it was likely to be difficult persuading many of the leavers to come back.

“High net worth or wealthy entrepreneurs have options. She should treat them like they are her best clients,” he added. “I don’t know any person in my circle who is not moving this April, or next April if [their children] have a school year or something like that.”

Sawiris also confirmed that changes to inheritance tax — which were introduced by Labour — also played a role in his decision to give up his UK residency. Reeves used the October Budget to end the use of offshore trusts to avoid UK inheritance tax at 40 per cent.

The change means that wealthy people will be “risking half your net worth” if they die while staying in the UK, he warned.

“On April 7, if a bus hit me [then] my family is bankrupt because they have to pay 40 some per cent in taxes, because my assets are not liquid. They have to go through a fire sale to pay that bill.”

Sawiris, whose net worth was pegged at $9bn by Forbes, is the youngest son of the late Onsi Sawiris, who founded a construction company in the 1950s and built it over decades into a large multinational corporation now called Orascom Construction.

As the business grew, the family diversified, entering the cement industry and expanding operations from Egypt into other emerging markets.

Sawiris’s family, who are Coptic Christians, were targeted with tax grabs and a travel ban by the Muslim Brotherhood, which swept to power in Egypt in 2012 in the aftermath of the Arab uprisings, although it was later deposed in a coup.

The UK “gave me a home when the Muslim Brotherhood came to Egypt and I will always be in debt”, he said. “I’m keeping my house, I’m growing my investment in Aston Villa, looking at expanding the stadium. And it hasn’t changed my love for this country.”

He said his remarks came out of care for the UK, where three of his four children were born. Sherine, his wife, is a member of the board of trustees of the American School in London, which his children attended.

Exiting UK taxpayers face limits on how much time they can return to spend in the country each year, in many cases 90 days annually, with just 30 days permitted for work.

Sawiris will use some of those days to visit and attend matches of his Birmingham-based football club Aston Villa, which exited the Champions League last week despite a spirited attempted comeback in the second leg of the quarter-final against Qatar-owned Paris Saint-Germain.

He and US billionaire Wes Edens, co-founder of Fortress Investment Group, acquired a 55 per cent stake in the club for £30mn in 2018, rescuing it from financial crisis and returning it to English football’s Premier League, where the team currently sits in seventh place.

Sawiris and his partners have invested heavily into the football club to improve performance. However, the club is not yet profitable and previously sold young players to comply with Premier League financial regulations that limit how much teams are allowed to lose.

Sawiris has complained that the rules are anti-competitive and prevent challenger clubs from closing the gap with the likes of Manchester City and Liverpool.

“The Premier League is under the impression that what makes it great is Manchester United and Liverpool and Chelsea and Arsenal, so they have to cater for these guys. But what makes the Premier League great is that Manchester United get their butts kicked by Brighton.”

Aston Villa will see the capacity of its stadium boosted to more than 50,000 seats from current levels of 42,000, as part of a plan by Sawiris to invest around £100mn more into the team. However, development is pending local officials moving ahead with expanding rail links.

Sawiris redomiciled his NNS Group family office last year from Luxembourg to Abu Dhabi, where he has built close relations with its rulers and has become a rare outsider to have been granted citizenship. He told the FT last year that Abu Dhabi’s advantages include a stable and effective government as well as “English law without English weather”.

Through NNS, Sawiris controls his holdings in Dutch-listed fertiliser company OCI, sportswear group Adidas where he sits on the board of directors, the stake in Aston Villa and as well as others.

Sawiris last year also joined the board of XRG, a company created by Abu Dhabi’s national oil company Adnoc to invest in global energy assets.

Sawiris said his London office, which sits above the Phillips art gallery, was vacated in the past few weeks. He has relocated over 40 employees to Abu Dhabi.

“They [my employees] have to move to a 45 per cent tax saving, so it’s not that tough for them,” he laughs.