Home Office announces important changes to the Tier 1 (Investor) visa category
Today the Home Office has released a Statement of Changes to the Immigration Rules which introduces broad and sweeping changes across many categories in the Immigration Rules. The majority of changes will come into force on 6 April 2015.
Tier 1 (Investor)
• While previously 16 year olds were able to apply for leave as a Tier 1 (Investor) Migrant, the age will now be raised to 18.
This has been amended as it is not normally possible for 16 and 17 year olds to be wholly in control of their own funds.
• There is now a requirement in the Immigration Rules that applicants must open a UK bank account before they make their application.
• There is an additional specified evidence requirement as confirmation of this (a letter from a UK regulated bank).
This will ensure that banks are able to carry out their due diligence checks before the Applicant enters the UK, rather than this process causing delays in the Applicant making their investments in the UK.
• Changes to specified evidence of investment funds, including a specification that where the applicant relies on a letter from their bank outside of the UK, all information must be contained in the same letter.
The requirement that information is contained in one letter appears inconsistent with paragraph 245AA(d) of the Immigration Rules which allows individuals who have submitted a specified document which does not contain all of the specified information, and have also submitted another document with the application which confirms the missing information, to rely on the second document to meet the requirements for specified evidence. It is not yet clear how these conflicting rules will interact in practice.
• A definition of property investment and property management has been added to the rules: 'in this context any investment or development of property to increase the value of the property with a view to earning a return either through rent or a future sale or both, or management of property for the purposes of renting it out or resale. The principle is that business income must be generated from the supply of goods and/or services and not derived from the increased value of property or any income generated through property, such as rent.'
This change is also reflected in the Entrepreneur category, and provides further guidance on what is and is not acceptable in relation to property.
• The requirement to maintain the investment has been amended so that an individual can maintain their investment by re-investing the gross proceeds from a sale, rather than having to reinvest the original purchase price of that investment.
On 6 November 2014, significant changes were brought in to this provision for investors. This change required investors to always invest £2 million and when investments were sold, to re-invest an amount equal to the original purchase price for the investment which had been sold. This was considered to be unfair, because if an investment was sold for less than the individual paid for it, they would need to find additional funds in order to maintain their funds. The new requirement is simply that the gross proceeds from the sale be re-invested. This applies whether the sale price is higher or lower than the purchase price. This provision has been brought in after extensive consultation with the Tier 1 policy team, immigration lawyers and wealth managers.
• Further clarification has been added in relation to taxes, professional fees and transaction costs incurred in the purchase and sale of investments. The rules will clarify that these costs cannot be paid from the investment funds. However if there is a surplus investment, then these fees can be taken from that surplus.
This provides clarification that was not previously explained in either the Immigration Rules or guidance.
• The rules are also amended to state that any reinvestment following a sale must be made before the next reporting period or within 6 months of the date of completion of the sale, whichever is sooner
• There are also changes to the specified evidence requirements to demonstrate that an investment has been maintained.
• Applicants now may withdraw interest and dividends from their investments
Providing the investment is maintained, other funds such as dividends which can be withdrawn without affecting the level of investment. This was not previously clear in the Immigration Rules.
There are also a number of changes coming into force in March 2015 in relation to rights of appeal from the Immigration Act 2014, which will affect some Tier 1 (Investor) applicants.
Further and more detailed blog articles will be published about these changes as the UKVI updates the internal guidance documents.
For information and advice about Tier 1 (Investor) initial or extension applications, please contact our specialist immigration barristers on 0203 617 9173 or info@richmondchambers.com.
