THE SCF GROUP HAS BEEN ADVISING UPON UK FISCAL MIGRATION FOR OVER 25 YEARS
FISCAL MIGRATION – UNITED KINGDOM
TIER 1 – HIGH NET WORTH INVESTORS
Notwithstanding the ‘home’ goal of the Brexit decision, the United Kingdom and in particular London remains a very attractive location for high net worth individuals and their families. The reasons are many but certainly include the UK’s political and financial stability, the unparalleled attractions of London, the investment opportunities offered in the City, international lifestyle, schooling, universities, theatres and much, much more. For high net worth individuals, it is possible to apply to permanently settle in the UK in as little as 2 years provided they have spent over 180 days in the UK in any given calendar year.
WHY SCF IS UNIQUE
Tax Planning – Relocation – Property Investment
There are many fiscal migration firms in London but to the best of our knowledge none that can combine pre-arrival tax planning, property investment and relocation services under one roof. As part of our service we can assist with locating both investment and residential properties, recommending and arranging school entrance, staff and most other relocation needs.
TIER 1 Investment Category Criteria
The UK uses a point based immigration system similar to that used in the United States – Tier 1 applicants are those that are in a position to make a significant fiscal investment into the UK and must:
- Have a minimum of Sterling £1 million of his or her own money available to invest in specified investment categories in the UK, with such sums being either under the individuals direct control or alternatively under the control of a regulated financial institution and fully disposable within the UK;
- Have a minimum of Sterling £2 million minus any liabilities of his or her own assets; and
- Have a minimum of Sterling £1 million, under his or her control, held in a regulated financial institution and fully disposable in the UK even if such sums are leant to him or her by a regulated financial institution.
In either case, at least Sterling £750,000.00 of the available funds must be invested in UK Government Bonds or in active UK trading companies, which for example could include a managed property investment company. Most importantly, Tier 1 applicants are not subject to any annual numeric restrictions, do not need to be involved (although this may be advisable if a higher return is required) in any an active UK business and may automatically bring in their spouse and children.
THE USE OF TRUSTS & PRIVATE INTEREST FOUNDATIONS
It is important to note that Tier 1 investments must be made by an individual and not a trust or private interest foundation but notwithstanding this the above criteria will not prevent the remainder of the sums being invested into the UK (or indeed held outside the UK) from being fiscally segregated and protected allowing many high net worth fiscal migrants to enjoy a very favorable tax environment.
PRE-MIGRATION TAX PLANNING
The UK and the Republic of Ireland operate a unique tax system that specifically benefits non-domiciled individuals even if such individuals are ordinarily resident in either country. In the case of the UK, there have been certain restrictions and indeed levies that have been introduced in recent budgets but none the less, new fiscal migrants (at least for the first 7 out of 9 years of UK fiscal residence) can still create structures that allow them to ensure that they will only be taxed on their UK remitted income and not on their worldwide assets. In the UK, the concept of domicile is based primarily on the place of birth of one’s father, which if outside of the UK normally means that the UK (even if one subsequently obtaining a UK passport) is not the jurisdiction of one’s domicile.
THE UK FISCAL MIGRATION PROCESS
The first stage for all potential migrants to the UK is to apply for entry clearance before travelling to the UK whereupon a suitable visa will be issued. Entry clearance is what grants an individual and their family the right to both enter the UK and remain in the UK per the applied for criteria. Initially a Tier 1 investor will be given a visa to remain in the UK for 3 years and 4 months and then apply for a further 2 year extension if required.
Indefinite leave to remain in the UK (i.e. permanently settle in the UK) will depend on the investment made into the country. For an individual who has invested Sterling £1 million per the above criteria, they will be able to apply for indefinite leave to remain once they have been continuously resident for 5 years; where the investment is Sterling £5 million, the application can be made within 3 years whilst an investor who has made an investment of £10 million or more needs only wait two years before being able to apply for indefinite leave to remain.
Unless married to a UK citizen, a Tier 1 immigration applicant (having been habitually resident in the UK for at least 75% his or her time in the UK) must wait 5 years before applying for a British passport. Where an applicant is married to a UK citizen this period is shortened to a 3-year period.
For more information on our UK fiscal migration, relocation and property finder services please contact an SCF Consultant.