Everything you need to know about 2015 changes to Tier 1 Investor Visa and Entrepreneur Visa rules

The Home Office has announced changes to the immigration rules for the Tier 1 Investor and Entrepreneur Visa applicants. In addition, how such applicants are taxed has changed as there are increases to the remittance basis charge. All these changes take effect after 6 April 2015.

Tier 1 Investor Visa applicants

There are several changes that require forward planning.

There is a new requirement to open a UK bank or investment account /before/ applying for the visa. This means that applicants may need to spend more time in the UK in order to open an appropriate account. The time needed to process the opening of the account also has to be anticipated.

Historically, problems arose where the visa applicant invested in qualifying investments but failed to notice that they had dropped in value beneath the necessary threshold. This meant that an application to renew the visa might be rejected on the grounds that the applicant had failed to hold the minimum investment for the duration of the visa.

The problem could be solved by 'topping up' the qualifying investment with additional funds. But this had the potential to create adverse tax consequences as bringing foreign income or gains to the UK post-arrival could be a taxable remittance.

The Home Office has announced that from 6 April 2015 there will be no need to top up the qualifying investment if its value goes down or if an investment is sold at a loss. This is providing that the gross proceeds are reinvested in a new qualifying investment by the end of the next reporting period, or six months from the date of disposal.

Applicants need to ensure that they bring in sufficient tax-free capital upfront to pay for the projected expenses as the capital of the qualifying investment cannot be used to pay investment management fees, UK taxes or other charges.

Any interest or dividends on the qualifying investment, which are taxable as they arise, can be removed from the investment account and used however the applicant sees fit, for example to pay the tax thereon.

Tier 1 Entrepreneur Visa applicants

There is also a tightening of the rules for Entrepreneur Visa applicants. From 6 April a detailed business plan is required as well as a genuine intention to create jobs.

Changes to the remittance basis charge

From 6 April 2015 there will be changes to how wealthy migrants who do not intend to make the UK their permanent home, commonly known as non-doms, are taxed.

Foreign income and gains earned pre-arrival can continue to be brought to the UK tax-free. Post-arrival, non-doms can elect to be taxed on the remittance basis, whereby their UK source income and gains are taxed as they arise but foreign source income and gains are only taxed to the extent that these are remitted to the UK. After being UK resident in seven out of the previous nine tax years, non-doms can either elect to pay tax on worldwide income and gains as they arise, or can claim the remittance basis and pay the remittance basis charge of £30,000pa. There is no requirement to pay the remittance basis charge if the unremitted foreign income and gains are less than £2,000pa.

From 6 April 2015 the remittance basis charge will increase from £50,000pa to £60,000 pa for those people who have been resident in twelve out of the previous fourteen tax years. In addition a new band of £90,000pa will be payable by those people who have been resident in seventeen out of the previous twenty tax years.

For more news and updates, assistance with your visa needs or for a Free Assessment of your profile for Immigration or Work Visa’s just visit www.y-axis.com