EU migration was the weekend’s hottest topic, with David Cameron’s desire to cap immigration from EU member states attacked by European Commission President Jose Manuel Barroso. For once, it seems, Nigel Farage and the European Commission agree.
Less media attention has been focused on the other recent immigration developments. The long-awaited changes to the Tier 1 (Investor) visa category were announced at the end of last week. These changes will come into effect on 6 November 2014. They are most likely to affect high net worth, non-EU individuals because of course EU citizens have free movement rights in the UK, for now at least.
A quick reminder: under the existing rules, anyone holding £1 million of liquid assets for investment in the UK is able to obtain entry clearance for themselves and their close family members with a Tier 1 investor visa (the ‘Investor Visa’). The Investor Visa route is very popular (there were almost 1,400 granted in 2012 alone).
For those who wish to settle in the UK on a long-term basis, a fast-track procedure to settlement or ‘indefinite leave to remain’ is available in conjunction with the Investor Visa. This is dependent upon the level of investment in the UK, which can be £1 million, £5 million or £10 million.
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In essence, the more you invest, the fewer number of years that need to be ‘on the clock’ before indefinite leave to remain can be sought. For those who make the highest investment to get on the fast-track to settlement, British citizenship can be achieved in five years rather than six, provided the residence and other requirements for citizenship are satisfied.
One of the attractions of the Investor Visa for international individuals is that they are still eligible to seek indefinite leave to remain even if they have spent up to half of every year outside the UK, providing flexibility to run overseas businesses and/or take holidays abroad.
The changes:
• The current £1 million minimum investment threshold will increase to £2 million. Doubling the minimum investment sounds aggressive, but it is the first increase since 1994 so some would argue it is long overdue.
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• 100 per cent of the investment sum must be invested in prescribed forms of investments (share or loan capital in active and trading UK companies, or UK government bonds), rather than 75 per cent at present. The ability to invest 25 per cent of the investment sum in other assets, including residential real estate, has been withdrawn. This move is likely to be very unpopular, as applicants already assert that the prescribed categories of investment are unattractive, offering poor returns compared with other asset classes.
• By contrast, investors will welcome the abolition of the requirement that the investment must be ‘topped up’ if the market value of the portfolio falls below the threshold.
Transitional provisions will be introduced so that holders of Investor Visas will not be subject to these changes when they apply for extensions or for indefinite leave to remain. However, those who do not already have an Investor Visa are now faced with the new, more stringent regime, except perhaps one or two fortunate individuals who have had the £1 million investment sum available to them for at least three months and who can make an immediate application.
Using a premium service, and with a strong wind behind them, there is a chance that their application might be reviewed and granted before 6 November. The mantra for those few? Do not delay – apply today.
Corinne Staves is a partner at boutique private wealth law firm Maurice Turnor Gardner LLP
