Updated: Aug 8, 2019
Since 2014, the Tier 1 (#Investor) route has changed no less than three times (in small or large doses) with the latest changes on 29 March 2019.
Many have now considered the £2 million route to be an absolute pain (against the previous £1 million investment). However, is it truly a pain, or can it still be a positive #immigration route for High Net Worth individuals to consider?
At present, the Tier 1 Investor route requires the following essential criteria to qualify:
1. The individual (or jointly with their spouse) holds cash funds of no less than £2 million
2. The money must be held by the individual (or jointly with their spouse) for no less than two years
3. The funds must be freely transferable and disposable in the UK
4. The individual must have a bank account from a UK regulated financial institution for investing the £2 million in the UK
5. The individual must have gone through the FCA regulated institution's due diligence before the account was opened.
One would argue that there are not that many changes other than two very obvious differences.
The most obvious difference is the individual needing to confirm their source of funds for two years rather than previously, three months. To most, this is quite an administrative pain as they now need to show at least two years of their account activities rather than three months.
Furthermore, most individuals will not have cash sitting within their bank accounts for two years to show the Home Office (or #UKVI).
Fear not, even though most individuals do not hold their funds in their accounts for the necessary two years. The money must come from somewhere. As such, the Home Office allows individuals (not dissimilar from before) to evidence their source of funds by other means, such as:
• deeds of sale;
• evidence from a business;
• divorce settlement; or
• award or winning.
The Home Office also allows for funds that may not have been derived from the above, but specified evidence will need to be supplied.
In truth, the Home Office does not want to deter individuals from applying. They are only seeking to reduce the risk of questionable funds entering the UK, which purportedly was quite rife under the old rules.
The so-called additional paperwork is not much to gather in real terms.
Then there is the matter of how the person invests that troubles a lot of investor applicants. Gone are the days when the investment dumps the entire funds into Government bonds/gilts (which happened to be the most preferred route).
However, to most, this investment option (whilst other investment options were available) was the easiest for them to manage. In truth, most investors have voiced their unease by placing their most liquid asset into 'dead' funds for the five years.
As such, the Home Office has now cancelled the option to invest in bonds/gilts. Instead, individuals need to invest and maintain their investment in share capital or loan capital to UK registered and trading companies.
This surely must be a good chance for investors, rather than being sold or told that Government bonds were the easiest options. Investors are now suited to do what they generally do best with their money - invest (in its real terms).
Other than the above two real changes, a lot of the elements of the Tier 1 Investor route remains relatively the same.
As such, if an investor did consider Tier 1 (Investor) route to have been a good option, there is no reason why this route cannot continue to be.
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