Changes to the UK Tier 1 (Investor) visa category
The written ministerial statement laid in the House of Commons on 16th October 2014 by James Brokenshire, Minister of State for Immigration and Security and in the House of Lords by Lord Bates of Langbaurgh outlines a number of chnages to the UK Immigration Rules. Amongst a plethora of changes, transit visas are being reformed, closing a loophole that allowed abuse. Other technical changes are also being implemented across the rules.
One paramount change is that the Tier 1 (Investor) route which is designed to allow wealthy non-European citizens and their families to live in the UK in return for an investment into the UK economy is being reformed following recommendations from the Migration Advisory Committee. The minimum investment threshold will now be raised from £1m to £2m. Various changes will take effect on 6th November 2014, but any successful investor visa applicants that applied before that date are covered by the current £1m investment rules.
- The minimum investment required to qualify for an investor visa will increase from £1m to £2m.
- New investors will no longer be able to allocate 25% of the investment into UK assets such as UK property. Under the new rules, the entire £2million will need to be invested in UK trading UK companies, or UK government bonds (currently this is 75%).
- The loan option has been removed.
- Topping up of investments accounts will no longer be required if the invested amount falls below the required level. However, if investments are sold, they will need to be replaced within the same reporting period
- Entry Clearance officers are being empowered to refuse Investors if they have reasonable grounds to believe the funds were obtained unlawfully or if they have concerns about the character and conduct of the party “providing the funds”-this could extend to those gifting the funds to the investor.
For those investors wishing to apply before the change takes place on 6th November 2014 based on the current £1million investment or the loan option, they will need to ensure that the funds are available and that they have documentary evidence to prove that the funds have either been held for three months prior. As long as the evidence of funds are in place and the online visa applications are submitted prior to 6th November 2014, individuals will be able to come to the UK under the current rules.
Partner and Head of Immigration, Rahul Batra commented:
“The above change has been expected for a while and it does not come as a surprise that the UK government has decided to increase the minimum investment threshold to £2m. The change is driven politically to provide economic stability to the country, however the government seems to have ignored that there is stiff competition from a number of EU countries that also have investment-based visa schemes, which have a lower threshold. The UK has its own selling factors e.g. education, business, financial and cultural hub. Therefore, the new changes may not after all act as a deterrent to any prospective investors.
The new requirement to invest the complete £2 million into the portfolio of specified investments and the exclusion of investment of up to 25% of the overall amount into a UK home is an unexpected change. However, majority of our clients have historically invested entire monies into their stock/gilt portfolios. This change is likely to mean those coming as Tier 1 investors will look for greater returns from their UK investments and as a result wealth managers may need to look beyond offering gilts only portfolios. The removal of the requirement to ‘top up’ if a portfolio drops below £2million is a much desired change.
We await to see future changes in line with the Government’s statement that they will consult further on what sort of investments may deliver real economic benefits to the UK.
Should you have any questions about the above changes to the Tier 1 (Investor) visa rules, please contact Rahul Batra, Global Mobility Partner at the firm on +44 (0)20 3553 7711 or by email at email@example.com.