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?

EEA nationals and their family members have the right to reside in the UK; the situation may change following Brexit. Non-EEA 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

This is formally known as the Tier 1 (Investor) visa. Under this visa category, an individual from outside the EEA can apply for Entry Clearance (EC) for an initial UK residence visa which will be valid for up to 3 years and 4 months by bringing £2 million to the UK and investing these funds in permissible investments.

As long as the provisions continue to be satisfied, after an initial 3 year period the individual can apply for Leave to Remain (LTR) (an extension) for 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

This is formally known as the Tier 1 (Entrepreneur) visa. Under this visa category, an individual from outside the EEA 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.

After 3 years an individual can apply for LTR in the UK for an additional 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 settled workers in the UK.

After 5 years the individual can apply for Indefinite Leave to Remain (ILR) in the UK. Similar to the UK Investor visa, the UK Entrepreneur visa allows for accelerated ILR after 3 years if the business has created 10 full time jobs for settled workers in the UK, or has an income from business activity of £5 million.

Dependants

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

Additional Criteria and Citizenship

An individual applying for LTR or ILR should submit their (and their family’s) application(s) to UK Visas & Immigration prior to their current visa expiring.

In terms of an ILR application, the main applicant must not be absent from the UK for more than 180 days in any single year, and must usually meet the Life in the UK and English language test. An individual can lose their ILR if they have been absent from the UK for 2 years.

An individual will usually be eligible for citizenship once they have been resident in the UK for 5 years, and have had ILR for at least one year.  In a standard situation, it will usually take 6 years before an individual is eligible to become a British 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.

If an individual is married to or in a civil partnership with a British citizen, then they will usually be eligible to apply for citizenship once they have been resident in the UK for 3 years, and have ILR. In a standard situation, it will usually take 5 years before an individual is eligible to become a British citizen. To meet the citizenship requirements an applicant must not be absent from the UK for more than 270 days in the 3 year qualifying period, and for not more than 90 days in the final 12 months of that 3 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.

Updated September 2018

Categories: United Kingdom, 2018, Dixcart Domiciles