Lifestyles of The Rich

For once, size really isn't everything. Monaco is officially the world's most densely populated sovereign country, and almost every one of the 33,000 people resident there is seriously rich.

It is estimated that Monaco houses 2,000 millionaires and 50 billionaires, many of them living within the ward of Monte Carlo, making it the wealthiest place, per head and per square foot, on Earth.

The star-studded resident list includes Sir Philip Green, Shirley Bassey, Sir Stelios Haji-Ioannou of easyJet, and Sir Roger Moore. And there's one reason why most of them live there - tax. Or, rather, the lack of it.

Monaco is a tax-free haven. And the simplest way of understanding what this means is to talk to one of the 2,000 or so British expats who live there, such as chemicals tycoon Mike Peagram.

He sold his business eight years ago for £44 million, and by immediately moving to Monte Carlo for the next five years (the minimum time you have to live there to qualify for tax exemption), he saved himself £13million in capital gains tax.

These tax rules are simple, but vigorously enforced. You can spend a maximum of 90 days a year in Britain during the qualifying period. If you keep to the rules, then your tax bill is zero. Nought pence. Not a sausage.

It's the ultimate Don't Pay As You Earn society.

If you stay for five years, you are allowed to return to Britain, keeping the tax you saved.

But Mike liked it so much in Monte Carlo he decided to stay. And who can blame him? When I saw him, he was driving an Aston Martin, dined most nights in the array of glittering five-star restaurants, woke up to warm sunshine most days, walked through pristine streets (they are washed every day), saw no graffiti, and knew he could leave his house or car unlocked all day.

'Anything money can buy is available,' he told me, with a self-satisfied chortle. 'Whether that's great hotels, food, music, theatre, cars. Anything.'

But to afford all this, Mike reckoned you'd need £10million in the bank just to 'get by', and he wasn't joking.

Dining in the Alain Ducasse restaurant in the Hotel de Paris could set you back at least £1,000 with a nice bottle of wine. Even a Diet Coke in one of the cafés by the Monte Carlo Casino set me back nearly a tenner. I passed a watch shop, and saw one in the window for sale at £1million!

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