IN537 - Moving to the UK and the Opportunities Provided by the UK Investment Visa and the UK Entrepreneur Visa

Why the UK?

The UK is a very popular destination for many individuals. The legal and education systems are of high quality and there is an excellent choice of property, both residential and commercial. It offers a rich culture, traditions and history and has a distinctive “British way of life”, which many people feel comfortable with

The UK has a number of international airports; Heathrow, close to London, is the third busiest airport in the world and handles more international passengers than any other airport, with over 75 million passengers arriving and departing annually (an average of 205,400 passengers per day).

Tax Advantages Available to UK Companies

  • The UK has one of the lowest rates of corporation tax in the western world at 19%. This will be reduced to 17% in 2020.
  • There is no withholding tax on dividends.
  • The majority of share disposals and dividends received by holding companies are exempt from taxation.
  • Controlled foreign company tax rates only apply to a narrow classification of profit.

Tax Advantages Available to Foreign Individuals

Foreign individuals who are resident, but not domiciled, in the UK, have the opportunity to benefit from electing to be taxed on the remittance basis of taxation. This means that they pay tax on UK source income and gains, but foreign income and gains are only taxed if they are remitted to the UK. This status is available in their first 15 years of residence in the UK.

Who Can Move to the UK?

EU nationals have the right to reside in the UK. Non-EU nationals need to obtain a residence visa. There are two types of UK visa which are particularly popular with high net worth individuals and/or entrepreneurs:

  • The UK Investment Visa

An individual from outside the EU can obtain an initial UK residence visa for 3 years by bringing £2 million to the UK and investing these funds in permissible investments.

As long as the provisions continue to be satisfied, after the initial 3 year period the individual will be granted a further 2 year visa and, following this, can then apply for Indefinite Leave to Remain (ILR) in the UK. The rules allow for accelerated ILR after 3 years if an individual has invested £5 million and after 2 years if £10 million has been invested.

  • The UK Entrepreneur Visa

Individuals from outside the EU can qualify for a UK Entrepreneur Visa if they invest a minimum of £200,000 in a new, or existing, business in the UK and create new employment. In certain circumstances the initial investment can be reduced to a minimum of £50,000. The visa allows an individual to enter and reside in the UK for up to 3 years and 4 months.

When this initial time period expires, an individual can apply for an extension of the Leave to Remain in the UK for a further 2 years, as long as the individual remains engaged in the specific business activity detailed by the visa and the business has created at least two full time jobs for people resident in the UK. After 5 years the individual can apply for Indefinite Leave to Remain (ILR) in the UK.

Dependants

A spouse and children under the age of 18 can accompany the holder of either type of UK visa as dependants.

Additional Criteria and Citizenship

In terms of the ILR, the main applicant must not be absent from the UK for more than 180 days in any single year.

Currently an individual must be resident in the UK for 5 years, one of which must be post ILR, to be eligible for citizenship (unless his or her spouse is a UK citizen). To meet the citizenship requirements an applicant must not be absent from the UK for more than 450 days in the 5 year qualifying period, and for not more than 90 days in the final 12 months of that 5 year period.

Taxation

Individuals resident, but not domiciled, in the UK are eligible to pay tax on a remittance basis. With careful planning (particularly pre-arrival) this can result in a low UK tax burden.

Please note that the remittance basis of taxation in the UK is subject to change. For detailed information regarding these changes please contact the UK office: advice.uk@dixcart.com.

Which Services can Dixcart Provide?

Dixcart services include:

  • Pre-arrival tax planning.
  • Assistance in making applications for the UK Investment Visa and UK Entrepreneur Visa programmes.
  • Staff located in the UK who can offer a local perspective on the country and can provide tax advice.
  • Assistance in organising visits to the UK.
  • Assistance in finding property in the UK.
  • A comprehensive range of individual and professional commercial services once relocation has taken place, including ongoing advice and compliance regarding the UK tax position for individuals and businesses.
  • Family office services.

Further Information

For further information please contact: advice.uk@dixcart.com. Alternatively please speak to your usual Dixcart contact.

Categories: United Kingdom, 2018, Dixcart Domiciles