United Kingdom Residence Permit

United Kingdom

Investor Immigration Program

In 2008, the United Kingdom (UK) immigration authorities implemented a new application system for non-EU nationals who wish to gain entry to and residence in the UK. The system is points-based and divided into five tiers. The Tier 1 Investor category is aimed at attracting high-net-worth individuals to make a substantial capital contribution to the UK. Currently, the applicant must commit a minimum of GBP 2 million in the UK.

The UK is one of the most attractive places in the world both as a business location and as a place for private residence. The UK is known for having a stable democratic government and a respected system of law that has been adopted by countries across the globe and is well located between the USA and Europe. From a tax perspective, it can also be an attractive base for wealthy individuals and families taking advantage of the special tax treatment available to those who are not domiciled in the UK.

The UK is a member of the EU, but following a referendum in June 2016 in which the British people voted to leave the union, the nation is currently negotiating its exit and future relationship with the rest of Europe.

The UK boasts some of the best educational institutions in the world, from pre-school to university. Its capital London is a leading global city and the world’s most influential financial center. The city has the highest GDP of any city in Europe and houses corporate headquarters of numerous multinational corporations, financial institutions, professional firms, and major organizations.

Requirements

The Tier 1 Investor visa requires an individual to make a substantial financial commitment in the UK. In order to qualify, the applicant must have held no less than GBP 2 million under their control for two years in advance of the initial application. If the applicant has not held the funds for two years consecutively before the date of the application, they must also provide evidence of the source of their funds. The Home Office will consider the following sources of funds, provided that the applicant produces supporting evidence in the form of pre-specified documents: gifts, deeds of sale, evidence from a business, or proceeds from a will, divorce settlement, award, or prize.

Within three months of entry to the UK, the applicant is required to invest at least GBP 2 million that must be maintained throughout the period until permanent residence is granted.

The applicant must invest into UK share capital or loan capital in active and trading UK-registered companies other than those principally engaged in property investment. Investment in government bonds and offshore companies is not permitted. The financial commitment must be maintained for five years.

For the initial application, the applicant is not required to show business experience or the ability to speak English. A small annual contribution to the UK National Health Service is required, and if applying from overseas, the main applicant and any adult dependents will need to provide an overseas criminal record certificate from any country in which they have resided for at least 12 months in the 10 years prior to their application.

The applicant must open a UK investment account before submitting the visa application. The initial visa is valid for three years and the applicant and their family are permitted to work and/or study in the UK.

Before the expiry of the initial visa, the applicant and dependent family members must apply for an ‘extension of stay’. The UK government will grant a two-year extension if the applicant has maintained the required financial commitment throughout the term.

The UK Home Office expects the investor and their family to make the UK their main home by spending more time in the UK than elsewhere.

To qualify for settlement, the applicant must meet certain criteria applicable to each category. All applicants must prove that they have sufficient knowledge of the language and life in the UK and must pass the ‘Life in the UK’ test and an English language exam at level B1 of CEFR. The physical residence requirement stipulates that the applicant and their family must stay in the UK for more than six months per year.

Married or unmarried partners and dependent children under 18 can apply to reside in the UK along with the applicant. Furthermore, the UK recognizes civil partnerships that have been legally registered, including unmarried couples who have been living together for at least two years.

Once a resident, the applicant’s children will be entitled to the same public education benefits as British children, with certain restrictions applied only to college and university education.

Once permanent residence has been granted, all restrictions are removed. It is, however, important to maintain a physical residence in the UK to avoid losing one’s permanent resident status. One should not be away from the UK for longer than two years.

Procedures and time frame

The applicant and dependent family members will complete the immigration application forms, which will be submitted with all supporting documentation in the applicant’s home country. An applicant can only apply from inside the UK if changing their status from another qualifying category, for example, a student visa.

The application and supporting documentation must be submitted to the diplomatic post in the applicant’s country of residence. The time frame from the submission of the application is dependent on the embassy receiving the application, and approval may take between one and six weeks. Applicants from certain countries are required to register with the police within seven days of arrival in the UK.

Upon expiry of the initial three-year period, the main applicant and their family must apply for an ‘extension of stay’ from within the UK. The authorities will issue the applicant with a two-year extension if all relevant criteria have been met.

On completion of five years of continuous lawful residence, the main applicant and the respective family members may apply to be granted settlement, namely indefinite leave to remain in the UK (ILR).

An applicant who increases their qualifying financial commitment in the UK to a total of GBP 5 million may apply for settlement after three years in the UK, and a commitment of GBP 10 million qualifies for accelerated route settlement in two years. The investor’s dependent family members will be eligible to apply for ILR only after spending five years in the UK.

The main applicant would need to be able to demonstrate that they have legally spent a continuous period of five years in the UK (or two or three years if qualifying for the accelerated route settlement), have maintained the conditions required by the investor visa, and that they and any dependents over 18 (but under 65) years of age have sufficient knowledge of the English language and appropriate knowledge about life in the UK.

Upon being granted settlement and spending a minimum of five years in the UK (the applicant must have held ILR in the last 12 months of that period), it is possible to apply for British citizenship.

Dual citizenship

To qualify for citizenship, each applicant must meet strict residence requirements. A maximum of 450 days’ absence from the UK is allowed during the five-year period, including no more than 90 days’ absence in the last year preceding the citizenship application.

The UK allows dual citizenship.

Taxation

The main personal taxes in the UK are income tax, capital gains tax, and inheritance tax. There is no wealth tax in the UK.

UK residents who have their permanent home (‘domicile’) outside the UK may not have to pay UK tax on foreign income. If the applicant is considered ‘non-domiciled’, then they do not need to pay UK tax on foreign income or gains or both if they are less than GBP 2,000 in the tax year or if the applicant does not bring them into the UK (for example, if the applicant transfers them to a UK bank account).

For income earned in the UK, income tax is chargeable at progressive rates, with a current maximum rate of 45% on taxable income above GBP 150,000 annually.

UK capital gains tax is charged at a maximum rate of 28%.

Inheritance tax is charged upon death at a flat rate of 40% on the full value of the estate, with an exemption of the first GBP 325,000 of the estate from this tax.

The UK has an extensive network of double tax agreements.

Key advantages

• International business environment London is the financial capital of the world
• Attractive tax regime for high-networth individuals who are resident but not domiciled
• Direct international flight connections to almost all major cities in the world
• World-renowned schools and universities
• Fast immigration application processing
• No business or management experience required
• Very objective entry criteria, with a predictable outcome.