1 This list is based on our estimates of the minimum wealth of Britain’s 1,000 richest people or families. The actual size of their fortunes may be much larger than our figure. The valuations were carried out at the beginning of January 2004. Where we say people are worth a certain figure, the present tense is used for brevity, though we are taking the January valuation date. As with last year, volatile stock markets in the first quarter of 2004 mean that some fortunes based on shares in quoted companies may be much lower. We have taken account of this but stick broadly with our January valuation date to give consistency with past Rich Lists and with other people in this year’s list.

2 We measure identifiable wealth, whether land, property, racehorses, art or significant shares in publicly quoted companies. We exclude bank accounts — to which we have no access — and small shareholdings in a private equity portfolio.

3 We tend to be cautious and try to give due consideration to liabilities. With our customary caution, we keep very low-profile rich people at last year's value where we have no new data on their wealth.

4 Many individuals in the list have generated their personal wealth from the sale of successful businesses. In valuing them, we have to take account of the tax paid on the sale proceeds. The simplest assumption would be to make a 40% deduction for capital gains tax (CGT). However, these entrepreneurs will have taken professional advice to reduce their tax bill. Not to be outdone, we have also taken professional advice from tax experts at Price Waterhouse Coopers, who have helped us produce the following more realistic assumptions on tax. (We are indebted to them for that help and would point out that the analysis is based on the firm’s extensive experience in the field and that no information on any of its clients has been disclosed.) The tax experts tell us that the notional 40% rate can often be reduced to 25% or even zero depending on whether the business is quoted or unquoted and on factors such as residency.

5 On inheritance tax, we have again taken advice from Price Waterhouse Coopers. While tax is payable on assets held at death at the rate of 40%, no tax is paid on assets transferred by gift seven years prior to death, nor on those assets that pass to a surviving husband or wife. Where there is no surviving spouse, it is assumed that sufficient planning will have been undertaken to reduce inheritance tax to a residual 5% rate. We assume foreign nationals will have taken advantage of the non-UK domicile status to avoid an inheritance tax liability.

6 We have stuck to some broad rules, widely recognised within the accountancy profession, to arrive at our valuations. All share stakes in publicly quoted companies are valued at the price given in the Financial Times on January 2, 2004, corresponding with last year’s date. When there has been a subsequent significant rise or fall in the shares, we have taken that into our calculations.

Private companies, and therefore stakes in them, are valued on the basis of their most recently reported pre-tax profits less a notional tax charge, multiplied by the relevant price-earnings (p/e) ratio. The p/e ratio is the current share price divided by the most recent earnings per share. As private companies do not have a quoted share price, the p/e ratio for every private company has been calculated by using the relevant sector’s average p/e ratio at the beginning of January.

Alternatively, when we have found a quoted company that nearly matches the private company in business activity, we use the quoted company’s p/e ratio as a yardstick for valuation. Where appropriate, we have also valued companies on their net assets, reflecting our customary cautious approach to valuations.

Family shareholdings are agglomerated where it is obvious that the family acts together to defend the company’s interests. We usually name and picture the leading family member to represent the whole family’s interests, although in one or two low-key families we have not highlighted a family member but simply called the entry, for example, the Thomson family.

7 Family trusts are also aggregated and included. We have distinguished between trusts held on behalf of family members — usually children and grandchildren, which we include as family wealth — and charitable trusts, which are not included. Information on millionaires’ charitable giving has come from a Sunday Times survey of last year’s 1,000 richest.

8 Land is valued on what and where it is. Most valuable is London land with planning permission, then other urban land, then good farming, forestry, poor farming and finally desolate land. We take account of shooting and fishing rights. Estimates of agricultural land values have been given by Strutt & Parker, the leading land agency and chartered surveying group, which says that land prices have been stable across the board in the past year.

The values per acre appear in a separate table.

9 Valuations of pop stars’ wealth are based on research by Cliff Dane, author of the regular series of Rock Accounts books. These incorporate detailed analyses of published accounts and disclosed earnings, catalogue valuations and estimates of income from current activity and retained earnings from music.

10 The art treasures have been valued by an expert who wishes to remain anonymous. This year we have devised a formula that seeks to take account of the huge tax liabilities faced by the British aristocracy when they sell Old Masters and similar treasures. Some of the owners may face tax liabilities of 80% of any theoretical sale price, but we have generally assumed that around half the proceeds would disappear in one form or another to the Inland Revenue.

11 Many new private companies run by millionaire owners have been unearthed this year through the sophisticated computerised searches and analyses of company accounts and directors’ shareholdings performed by Bureau van Dijk Electronic Publishing (020 7549 5000). Hemscott (020 7496 0055) has also been very helpful in identifying millionaire directors in quoted companies with stakes worth more than £25m.

12 The top 1,000 include people who may not be British citizens, such as Hans Rausing from Sweden, but who live and work in Britain. British citizens abroad are also included, but we exclude Rupert Murdoch, the chairman and chief executive of the News Corporation, parent company of The Sunday Times, because he is an American citizen and is based in America. Forbes magazine, in its list of world billionaires (March 2004) puts Murdoch’s fortune at £4.2 billion. If he were in this list, he would be ranked fourth. We include citizens of the Irish Republic in the main list only if they have extensive UK business interests or were born here. The 200 richest Irish people, north and south of the border, can be found by following the link to the search for Ireland. Similarly, the 100 richest Scots are in the Scotland search. The Scottish list contains 72 entries that appear in the main list and brief notes on another 28 who do not. The 20 Welsh people in our main list are highlighted separately in a table.

13 We have used a large network of local correspondents. We offer special thanks to our man who knows the car dealers and who has extraordinary knowledge of the rich in general. We acknowledge the help of the News International and Press Association libraries. The staff at Companies House and Balfour News in Ealing should also be thanked.

14 Anyone with suggestions for names that could be included in future lists should write in confidence to Philip Beresford, c/o The Rich List, Business Section, The Sunday Times, 1 Pennington Street, London E98 1ST, or e-mail: philipberesford@aol.com. The deadline for prospective candidates for the 2005 list is early January 2005.

15 Reference sources we have used include the national and regional press, plus a host of other publications:

BusinessF1, Quote 500, Bilan, Scottish Business Insider, North West Business Insider, Yorkshire Business Insider, Midlands Business Insider, Real Business, Real Deals, Management Today, Director, Estates Gazette, Forbes, Fortune, Business Week, Investors Chronicle, The Economist, Who’s Who, Debrett’s People of Today, Who’s Who in the City, Crawford’s Directory of City Connections, Directory of Directors, Acquisitions Monthly, Strategic Holdings For Takeovers, Fulcrum Index of Nominees and Their Beneficial Owners, Labour Research, The Corporate Register, Vacher’s Parliamentary Companion, Who’s Really Who, Nigel Dempster’s Address Book, Debrett’s Peerage & Baronetage, Directory of the Turf, The Sunday Times Profit Track, The Sunday Times Fast Track, The Treasure Houses of Britain, Who Owns Scotland, Who’s Who in the North, Wills Information News Service, Andy Wightman's Who Owns Scotland, Asian Directory and Who’s Who International, Asiana Top 300 Asian Millionaires, The Midland Millionaires by The Birmingham Post, Northern Ireland’s Top 100 Companies by The Belfast Telegraph, The Sunday Times Wealth Register, Radio 5 Live Sports Yearbook. WealthWatch, produced by Sunrise Publishers (01208 832 272 or www.sunrisepublishers.com) has been invaluable in providing intelligence on the rich and suggesting many new leads.