Tier 1 Investor Visa - A Guide To Property & Real Estate
For many individuals looking to relocate to the UK under the Tier 1 Investor visa route, the question of whether they can rely on property to secure a Tier 1 Investor visa or invest in property once in the UK as a Tier 1 Investor is a natural one. In this article we seek to answer the property-related questions that are most frequently asked by our Tier 1 Investor visa clients.
Can an investor rely on the value of property to secure a Tier 1 Investor visa?
Not any more. If you are applying for a Tier 1 Investor visa for the first time, you must have money of your own, under your own control, held in a regulated financial institution and disposable in the UK amounting to not less than £2 million. Your funds must be held as either cash in the bank or investments. You cannot rely on the value of assets or possessions as evidence of your funds. So, you cannot rely on the value of your property, or an estimate of the money that will become available when your property is sold, as evidence of funds available for a future Tier 1 Investor visa investment.
Prior to 6 November 2014 it used to be possible to secure a Tier 1 Investor visa by relying on property with a value of not less than £2 million, combined with a loan of at least £1 million from a UK regulated financial institution. Individuals who initially applied on this basis can still obtain an extension of stay and settlement on the same basis, but this option has not been available to any new Tier 1 Investor visa applicants since 6 November 2014.
Can an investor rely on the proceeds of sale of property to secure a Tier 1 Investor visa?
Yes. Although a Tier 1 Investor visa applicant cannot rely on the actual or potential future value of property in order to secure a Tier 1 Investor visa, investment funds held as cash may originate from a sale of property. So, if you have at least £2 million tied up in a property (or properties) that you (or you and/or your husband, wife, civil partner, or unmarried or same-sex partner) own then you can sell the property (or properties) and, once the property is sold, rely on the proceeds of sale for the purpose of a Tier 1 Investor visa application.
What evidence does a Tier 1 Investor visa applicant need to provide if they have sold a property?
If you have released investment funds by selling one or more properties and have not held the funds for 3 consecutive months before the date of the application, you will need to provide evidence of the source of the funds. In the case of a sale of property, this means (a) a deed of sale of the asset; and (b) a letter from a legal adviser.
The deed of sale must be an original document and should meet the relevant legal requirements of the country of sale. The deed of property sale must clearly show the amount of money raised, the name of the person who sold the asset (which may be yourself and/or your husband, wife, civil partner, or unmarried or same-sex partner) and the date of the sale. The confirmation letter from the legal advisor must contain certain mandatory information, including details of the property sold, the date of sale and the amount of money received from the sale.
If you have sold a property and held the proceeds of sale for more than 90 days, you are not required to provide the evidence mentioned above. However, we recommend doing so. UK Visas & Immigration (UKVI) has power to refuse an application for a Tier 1 Investor visa if it is satisfied that an applicant is not in control of and at liberty to freely invest the money or if it considers that the money has been acquired by means of unlawful conduct. It is therefore important to satisfy UKVI as to the provenance of investment funds.
Can property be relied on for any other part of a Tier 1 Investor visa application?
Yes, as evidence of relationship when relying on joint money or money held by a partner. If you are making an initial application for a Tier 1 Investor visa and you are relying on money held jointly with, or solely by, your husband, wife, civil partner, or unmarried or same-sex partner, you will need to prove your relationship with your partner. If you are not married but have been living together within a committed relationship for at least 2 years, you will need to provide certain documents that prove your unmarried partnership. Amongst these, an official document such as a deed of ownership or a mortgage agreement showing a joint investment in property could be relied upon to prove your relationship.
Can a Tier 1 Investor visa holder invest in property in the UK?
Yes and No. If you were granted initial Tier 1 Investor entry clearance, leave to enter or leave to remain under the Immigration Rules in place before 6 November 2014, then in order to qualify for an extension of stay or settlement you will need to have invested not less than £750,000 of your capital in the UK by way of UK Government bonds, share capital or loan capital in active and trading UK registered companies. However, you are permitted to invest any remaining balance up to £1 million by purchasing an asset (or assets), which can include the unmortgaged portion of a property which you use as your own home.
When relying on property, only the unmortgaged portion of your own home can be considered, up to a value of £250,000. In previous articles we have looked at the meaning of ‘own home’ and the situation of Tier 1 Investor visa holders who own multiple properties or properties in joint ownership.
However, if you were (or will be) granted Tier 1 Investor entry clearance, leave to enter or leave to remain under the Immigration Rules in place since 6 November 2014, then in order to qualify for an extension of stay or settlement you will need to have invested not less than £2,000,000 of your capital in the UK by way of UK Government bonds, share capital or loan capital in active and trading UK registered companies. It is no longer possible to rely on the purchase of property in order to satisfy the requirement to have invested in the UK.
Can a Tier 1 Investor visa holder invest in a property-related business?
It depends on how the business generates its income. Under both the old £1 million route and the current £2 million route, a Tier 1 Investor visa holder can invest by way of the purchase of share capital or loan capital in active and trading UK registered companies. However, paragraph 65(c) of Appendix A to the Immigration Rules confirms that an investment made in a company mainly engaged in property investment, property management or property development is not a qualifying investment for the purpose of the Tier 1 Investor route.
Nevertheless, in a technical development since we asked Can Investors and Entrepreneurs invest in property? the rules now also confirm that what is prohibited is not investment in a property-related businesses per se, but 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. Therefore, where business income is generated from the supply of goods and/or services and not from the increased value of property or any income generated through property, such as rent, then a Tier 1 Investor visa holder can invest in a property-related business.
By way of illustration, the restriction in paragraph 65(c) of Appendix A would prevent a Tier 1 Investor migrant from investing in a company which purchases the title to a property, develops the property and then earns a return through selling the property, renting it out or both. Equally, points will not be awarded where an investment is made in a company which manages property, whether or not owned by the company, for the purpose of renting it out or resale. This would exclude investment in, for example, a property letting agency or a company engaged in the management of student accommodation. However, it would be open to a Tier 1 Investor to invest in a wide range of property-related businesses, including but not limited to:
- A construction firm, where the main commercial activity from which the business derives its income is the building of property;
- A property refurbishment business, where the company does not own the property which is being improved;
- A hotel, where the property is not being rented out and guests do not sign a tenancy agreement;
- A real estate agency, providing that the estate agency is only engaged in marketing property and is not involved in letting properties or acting as a landlord.
Contact Our Tier 1 Investor Immigration Lawyers
For expert advice in relation to an application for entry clearance, further leave to remain or settlement as a Tier 1 Investor, contact Paul Richmond. Alternatively, you can reach our immigration barristers and lawyers in London on 0203 617 9173 or via our online enquiry form.