Battersea Power Station, London, built between 1929 and 1935
UNITED KINGDOM
Residency by Investment
UK Golden Visa
UK Tier 1 (Investor) Visa
Apply for the UK investor visa
Description of the UK Residency by Investment Program
Get UK residency. Investors from outside the European Economic Area (EEA) and their spouses (partners) and (adopted) children under 18 can apply for a UK Tier 1 (Investor Visa) by investing £2,000,000 benefitting the UK over 5 years (also known as the UK Investment Visa or simply "Golden Visa"). After 5 years of qualifying UK residence (183 days per year), investors can apply for indefinite leave to remain (ILR, permanent UK residence) and, 12 months later, for UK citizenship and the British passport.
- In March 2020, the UK re-introduced the iconic blue UK passport with the back cover carrying the floral emblems of England, Northern Ireland, Scotland, and Wales. The British passport is valid for 10 years
- As of 1 January 2021, UK nationals will no longer be considered EU citizens, but third-country nationals
- British citizens have visa-free travel (or visa on arrival) to 185 countries and territories. Dual citizenship (dual nationality) is allowed in the United Kingdom (that is, a second passport is possible in the UK)
- The investments must be maintained during the full stay in the UK
- The UK Tier 1 investor visa is valid for 3 years and 4 months (i.e. 40 months) and can be extended for another 2 years.
The British investor visa allows its holder:
- to study and work in the UK
- to live outside the UK for less than 180 days
- to benefit from the UK resident non-domiciled tax regime
> For resident non-domiciled individuals non-UK sourced income may be taxed, during the first 7 years of UK residence, on the remittance basis (rather than on the arising basis), that is, taxed only if and when such income it is remitted to (taken into or used in) the UK. Thereafter, a Remittance Basis Charge (RBC) of £30,000 per year is payable until the person is deemed domiciled (after 15 years).
> The
"Accelerated Route" was introduced in 2011 and provides for significantly shorter time to ILR, that is, after only 3 years (£5,000,000) or only 2 years (£10,000,000) for the applicant only (not any dependants).
| Launch date | June 2009 (in reality, the UK Government has operated a migration route for investors since October 1994) |
|---|---|
| Rule change 1 | April 2011 (introduction of the “Accelerated Route”) |
| Rule change 2 | November 2014 (the qualifying investment amount is raised from £1m to £2m) |
| Rule change 3 | March 2019 (written evidence of source of funds is henceforth required) |
Key Benefits of the UK Golden Visa
- Investors relocating to the UK can benefit from the British resident non-domiciled tax regime, a form of preferential lump-sum tax
- English language skills are not required: although investors can work in the UK if they want to, they should not need to work
- UK boarding schools and universities benefit from broad international reputation
- Under the UK residence program, British citizenship is possible after 6 years (since 2019, however, English language skills corresponding to level B1 as per the CEFR are required) which is a relatively short waiting period in comparison to other permanent residence by investment (RBI) programs such as Australian Permanent Residence (citizenship in Australia after 5 years), Gibraltar Permanent Residence (British citizenship after 5 years), Austrian Permanent Residence (citizenship in Austria after 6 years), Portuguese Permanent Residence (citizenship in Portugal after 6 years), UK Permanent Residence (British citizenship after 6 years), Greek Permanent Residence (citizenship in Greece after 7 years), Italian Permanent Residence (citizenship in Italy after 10 years), Monaco Permanent Residence (Monaco citizenship after 10 years), Spanish Permanent Residence (citizenship in Spain after 10 years), and Swiss Permanent Residence (Swiss citizenship after 12 years)
- As the saying goes, "when a man is tired of London, he is tired of life..." (Samuel Johnson)
Key Downsides of the UK Investor Visa
- The UK investor visa imposes relatively strong presence requirements (of 183 days spent in the UK per year)
- Since 2019, applicants between the age of 18 and 65 for indefinite leave to remain (ILR) or British citizenship must prove their knowledge of the English language by having (i) an English qualification at B1 or higher or (ii) a university degree taught or researched in English
- Bank account opening in the UK can be a lenghty enterprise
- Brexit
- Halifax, Britain’s biggest mortgage lender, expects house price growth to slow considerably in 2022 and range between 0-2% only (here)
- Rainy weather
Physical Presence Requirements in the UK
| Yearly presence | Not more than 180 days outside the UK |
|---|
UK Investor Visa Investment Portfolio Rules
- UK Tier 1 investors must invest £2,000,000 into “share or loan capital in active and trading UK companies” registered with (i) UK Companies House and (ii) HM Revenue and Customs and PAYE with (iii) a UK bank account and (iv) at least 2 UK based employees who are not directors
- No leverage allowed (that is, no portfolio lending)
- No pooled investments allowed (as the latter cannot be guaranteed to be in the UK)
- No investments in property development and management allowed
- All the capital of the initial investment must remain invested while the applicant is in the UK under the Tier 1 (Investor) Visa
Tier 1 Portfolio Shifting Rules
If an investment is sold at a loss, the UK Tier 1 investor must purchase a new investment at the price at which the prior investment was sold. If an investment is sold at a gain, the UK Tier 1 investor must purchase a new investment at the price at which the prior investment was sold. New qualifying investments must be bought before the next reporting period or within six months, whichever comes first.
Banking and Transaction Fees
Asset management, brokerage, and safekeeping charges, in addition to any taxes, must not be settled from the qualifying Tier 1 investments (as this would deplete the invested capital below the initial level). Instead, those charges must be covered from additional funds (e.g. they could be debited from a separate "cost" account held at the same bank).
Personal Income Tax in the UK
| Yearly income | Income tax | Dividend tax |
|---|---|---|
| Under £37,500 ("Basic rate") | 20% | 7.5% |
| Under £150,000 ("Additional rate") | 20% | 32.5% |
| Over £150,000 ("Higher rate") | 45% | 38.1% |
- The personal tax-free allowance is £12,500 (for income under £100,000)
- The tax-free dividend allowance is £2,000
- The UK corporate income tax is 17%
- VAT in the United Kingdom is 20%
UK Stamp Duty Land Tax (SDLT)
(payable on the purchase of UK real estate)
| Portion of purchase price | Main residence | Additional residence | Commer. property |
|---|---|---|---|
| Up to £125,000 | 0% | 3% | 0% |
| Next £125,000 | 0% | 5% | 2% |
| Next £675,000 | 5% | 8% | 5% |
| Next £575,000 | 10% | 13% | 5% |
| Portion above £1.5m | 12% | 15% | 5% |
- Since April 2021, non UK-resident buyers (spending less than 183 days in the UK) must pay a stamp duty surcharge for overseas buyers of UK residential property in the amount of 2%
- The stamp duty holiday which was introduced in July 2020 as a temporary Covid measure will end on 01.03.2021 meaning that buyers can be charged between 2% and 17% on their UK property purchase depending on the value of the home they are buying and if they own more than one property
- Real estate brokerage fees in the UK of 1 - 2% are typically borne by the seller.
UK Stamp Duty Capital Gains Tax (CGT)
(payable when selling an asset)
| Shares, paintings, etc. | UK res. property | |
|---|---|---|
| Basic rate | 10% | 18% |
| Additional and higher rate | 20% | 28% |
- The Capital Gains Tax (CGT) allowance (on which no tax is paid) is £12,000 (but it is not applicable to resident non-domiciled individuals)
- Under private residence relief residents selling a UK home pay zero tax
- Since 2015, non-resident sellers of
any kind of UK property must submit a non-resident Capital Gains Tax return and pay 28%
Inheritance Tax in the UK
| Value of estate | Inheritance tax |
|---|---|
| Up to £325,000 | 0% |
| Above £325,000 | 40% |
> 7-years rule: gifts given beyond 7 years before death are tax free (thereafter 8% are due per decreasing year until the maximum rate of 40% is reached in the third year before death).
How to Get the UK Tier 1 (Investor) Visa
1) Applicants for the UK Tier 1 Investor Visa must (i) be over 18 and (ii) be able to prove the money belongs to them or their (un-)married (or same-sex) partner (iii) hold a UK account with one or more regulated UK banks where (iv) £2,000,000 must be available (v) without leverage (vi) for Tier-1 purposes.
- Investors must provide a letter issued by a UK bank (i) on letter-headed paper (ii) not older than 3 months and stating (iii) name and account number (iv) that the account purpose is to invest not less than £2,000,000 in the UK (v) the bank is subject to FCA regulation and (vi) that the bank has carried out all required due diligence and KYC checks
- The funds can also be outside the UK at the moment of application (but they must be freely transferable as confirmed in a bank letter)
- Investors who have not held the funds for 2 years consecutively before application date must (i) document the source of funds (for example, through a deed of gift, a deed of sale, evidence from a business, a will or divorce settlement, an award or winning) and (ii) provide a related confirmation letter from a legal adviser permitted to practice in the country where the document was issued
2) Residents from listed countries (e.g. China, Russia) must provide a tuberculosis test result before submitting their application.
3) Investors must provide a
(translated and certified)
criminal record from all countries where they stayed over 12 months (during the last 10 years).
Grounds for Refusal
1) False representation (lie or false statement regarding the application)
2) Fraud and forgery (a person submitted supporting information verified as being false by the case worker or entry clearance officer)
3) Non-disclosure of material facts (information was withheld)
4) Failure to cooperate (requested documents were not provided)
5) Criminal history: (non-)custodial sentence of (i) above 4 years: no time limit (ii) 1 - 4 years: relevant unless 10 years passed (iii) under 1 year: relevant unless 5 years passed since the end of the sentence
> Other refusal grounds: pending prosecutions, extradition requests, public order risks (extremism), deliberate debting, proceeds of crime, finances of questionable origin, (state-level) corruption.
> Exceptional circumstances include politically motivated convictions.
Costs of the UK Tier 1 (Investor) Visa
| Handling and due diligence fee | £15,000 (includes personal UK bank account opening) |
|---|---|
| Visa fee (main applicant) | £1,623 |
| Visa fee (each dependant) | £1,878 |
| Immigration Health Surcharge (IHS) | £500 (per visa year) |
How Long Does it Take to Apply for the UK Tier 1 (Investor) Visa
Submit application, take fingerprints and photo at visa application centre
3 weeks: visa issued, collection of biometric residence permit
Within 3 months: invest £ 2m (and maintain throughout stay)