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 2009. As with last year, with volatile stock markets in February and March, some fortunes based on shares in quoted companies may be much lower or higher. 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 today’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 have been even more cautious than normal this year in giving due consideration to liabilities. The stock exchange has forced directors of quoted companies to reveal when they have used their shares as collateral for loans. We have been severe in excluding almost all these shares from our consideration of wealth. Similarly, where companies have been involved in talks with banks over debt levels, we have been brutal and removed the owners or large stakeholders until their position is resolved.

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. Until the beginning of the current tax year, a company sale could reasonably attract a 10% rate of tax on the proceeds under long-standing Treasury rules known as taper relief. The increase in tax here to 18% has hardly made any impact as there have been very few company sales in the current climate.

5 On inheritance tax, we have again taken advice and, 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 before death or on those assets that pass to a surviving husband or wife. We assume foreign nationals will have taken advantage of non-UK domicile status to avoid an inheritance tax liability.

6 In valuing privately owned hedge funds in the City, we have tended to value them much lower than last year’s 10% of their funds under management, sometimes at half that level or less. Our valuation here depends on the strength of their accounts and reputation in the market. Some hedge funds have disappeared from the list this year simply because of adverse publicity in the press that could have destroyed investor confidence. We have relied on excellent work in valuing hedge funds by Martin Tomkinson, a leading financial investigative reporter. Also, we acknowledge excellent and pioneering work by Peter Koenig, a former Sunday Times business reporter, in analysing the returns achieved by private equity companies and the impact on the wealth of their leading partners.

7 We have torn up all our old models for valuing private companies. In the past we valued them on a multiple of their profits depending on their sector, track record and strength of their balance sheets. But as all the accounts of private companies are at least six months, and possibly up to 18 months out of date, the profit figures are too historic. We have certainly looked at the profits, but much more we have looked at the net asset figure in the balance sheet, the level of borrowings, the amount of cash available to the owners to tide over the company in these difficult times and the credit rating of the business. Even then we have cut our valuations by as much as 25% below the net asset figure to be even more conservative.

Family shareholdings are agglomerated where the family obviously 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 just called the entry the Thomson family, for example.

8 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.

9 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 land agency and chartered surveying group, which shows the declining price of much rural land in the past year. Click here for the agricultural land values table.

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

11 The art treasures have been valued by an expert who wishes to remain anonymous. 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. We have generally assumed that about half the sale proceeds would disappear in one form or another to Revenue & Customs. Similarly, if huge art collections were to be put up for sale at once, they could flood the market, depressing any proceeds.