Sarkozy 'exonerated' billionaire Aga Khan from paying tax, corruption inquiry hears

• Allegations emerged after letter was leaked to French investigative website
  
• Claims to prove that the British Knight, 75, was given diplomatic privileges
• Ex French president faces string of corruption probes after election defeat
  

By Peter Allen for MailOnline

Published: 11:57 EDT, 25 October 2012 | Updated: 14:58 EDT, 25 October 2012

Multi-billionaire British knight the Aga Khan was 'exonerated' from paying any tax at all by former French president Nicolas Sarkozy, it emerged today.

It meant that the tycoon, a Muslim prince who was given the title 'His Highness' by the Queen in 1957 and made a Knight Commander in 2004, could protect his vast fortune across the Channel.

This was despite being worth as much as £6billion and owning mansions, yachts, private jets, some 800 race horses and even a private island in the Bahamas.

Details of the incredible arrangement comes as Mr Sarkozy faces a string of corruption enquiries.

Allegations against the 57-year-old include claims that he illegally accepted cash from Liliane Bettencourt, France's richest woman, to pay for his election campaign in 2007.

This was allegedly in return for future tax breaks for the L'Oreal heiress, who, despite her vast wealth, wanted to pay as little money as possible to the government.

Now according to a letter leaked to the Paris investigative website Mediapart within a year of coming to power, Sarkozy used ‘exceptional powers’ to assist the 75-year-old Aga Khan, who was born in Switzerland but who has maintained strong links with Britain all his life.

The letter, dated April 4, 2008, pledged that the Aga Khan would be let off all 'direct taxes, stamp duty, and wealth tax' - saving him billions.

Mr Sarkozy gave the Aga Khan an obscure diplomatic 'courtesy' fiscal status usually reserved for heads of state.

The then president said a tax bill of zero was justified because the Aga Khan, who claims to be a direct descendant of the prophet Mohammed, runs a charitable foundation funding the poor in Africa and Asia.

Sarkozy wrote in the letter - published in full by Mediapart - that he offered the status after 'my government informed me about your project to establish in France an important delegation of the Swiss foundation, the Aga Khan Development Network'.

It was approved by Mr Sarkozy's budget minister Eric Woerth, MP for Chantilly, north of Paris, where the Aga Khan owns an estate and plunged millions into a historic racetrack and equestrian centre.

Mr Woerth is currently at the centre of two corruption enquiries, including the so-called 'Bettencourt Affair', which could see both he and Mr Sarkozy prosecuted.

The Paris mansion Sarkozy shares with his third wife, Carla Bruni, was raided by police after he lost his presidential immunity from prosecution in May.

Both Mr Sarkozy and Mr Woerth deny any wrong-doing.

The Aga Khan is the spiritual leader of some 20 million Ismaili Muslims, who donate money to him their leader, or 'bringer of light'.

He received the title 'His Highness' from the Queen on July 26, 1957, and is a personal friend of both Her Majesty and Prince Philip.

Despite this, he now spends most of his time across the Channel, meaning he can opt out of giving money to the UK's Inland Revenue.

The Aga Khan divorced his first wife, Sally Croker-Poole, a former English model, in 1995 - paying £20million to the mother of three of his children.

Last year, he divorced his second wife, the former German pop singer Garbiele Homey who became the Begum Inaara Aga Khan.

The divorce was finalised in France - meaning the Aga Khan only paid her the equivalent of £54million - a fraction of what a British court was likely to have awarded given his billions.

It was then that the French authorities noted the Aga Khan's lack of official tax records as a source of confusion in agreeing a settlement.

Contacted by Mediapart, both Mr Woerth and the Aga Khan declined to comment. Mr Sarkozy was today unavailable for comment.