Although the legal outcomes from Brexit will not become clear for several years, broad possibilities are now taking shape. Vikki Wiberg, Senior Counsel in Taylor Wessing's Immigration Team, considers how the referendum might impact on non-European high net worth individuals viewing these uncertain times as a chance to invest in the UK
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Immigration continues to dominate UK politics. Although a major consideration in many voters' minds when considering how to vote in the Brexit referendum on 23 June 2016, the legal outcomes from the vote to leave the EU will not become clear for several years. Broad possibilities are now taking shape and with change and uncertainty can also come opportunity.
How does the referendum impact on non-European high net worth individuals viewing these uncertain times as a chance to invest in the UK? The referendum does not impact on UK Tier 1 Investor visas currently held by high net worth individuals. Such visas are available to those investing £2m or more into qualifying investments namely UK Government bonds, share capital or loan capital in active and trading UK registered companies.
Visa holders who have invested in share capital should remember that if they take advantage of fluctuations in the stock market to trade their investments, the gross proceeds of any part of their investment sold (whether at a gain or a loss) during their visa period must be re-invested in qualifying investments in line with the investor rules.
The Investor visa does not grant a right to reside in Europe. However, depending on their nationality, holders can travel freely in Europe without applying for visas for countries they visit. Separately the Schengen visa allows for simplified travel in Europe for visa nationals. Currently there is no change to the rights of investors to travel and reside in Europe
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By GlobalDataLooking to the future we envisage that investors keen to retain flexibility to travel in Europe, whether for business or pleasure, may continue to look to European investment programmes such as those offered by Malta, Cyprus or Portugal as well as considering options for citizenship based on family right.
A separate consideration for UK based high net worth individuals is the impact of Brexit on the visa status of EU citizen UK based domestic staff; for example an Angolan national housekeeper working in the UK as a Portuguese citizen under the right to free movement. Whilst it will take time for the outcome of Brexit to be known, family offices may wish to consider residency options for these staff now. Domestic staff who have worked in the UK for five or more years may be eligible to apply for permanent residence under current UK immigration rules. This is also a stepping stone to British citizenship.
Permanent residence would take them outside of UK immigration control meaning they would not be impacted by any future removal of the right to free movement. Acting now could secure their status and avoid future disruption to the family office team.
The UK continues to offer a favourable tax regime as well as respected schools and a strong housing market from which investors can benefit. For those planning to invest £2 million or more there is merit in applying for a Tier 1 Investor visa at the same time. The visa allows the holder, and dependant family members, to live full time in the UK but also, if preferred, to spend shorter periods of time here as may suit their business and personal needs.
The visa can therefore act as a safety net for individuals to maintain a right to leave their home country at short notice. Subject to holders complying with certain conditions, they may also be eligible to apply for permanent residence after normally spending five years in the UK. We recommend that those considering applying for an Investor visa should take tax advice prior to submission.
Looking to the future, the devaluation of sterling and the linked impact on, for example, UK share prices, means there is likely to be an increased appetite from individuals looking at market uncertainty as a time to make new investments. This could counter the dramatic decrease in visa applications in this category following changes to the visa route in November 2014.
