From 6 November 2014, applications for Tier 1 investor visa for new entrants into this category will be subject to a higher investment threshold and restriction on the use of leveraged funds. New provisions have been put in place to control on the origin of funds and to refuse applications where the money had been acquired by means that would by unlawful in Britain.
The changes can be summarised as follows:
- The £1 million investment threshold is being raised to £2 million;
- 100% of the funds must be invested in UK Government bonds, share capital or loan capital in active and trading UK registered companies; investment into a property in the occupied by the investor will not counts towards the qualifying investment;
- Active and trading UK registered companies are now defined for the first time: these are companies which have a UK registered office or head office, have a UK bank account showing current business transactions, and are subject to UK taxation;
- There will be no requirement to “top up” the investment if its market value falls. However, if the balance drops below £2 million due to the sale of part of the portfolio, it must be topped up by purchasing more qualifying investments;
- Leveraged funds will not be permitted; a clarification from the policy team is sought on the practicalities of this restriction;
- Investor visa will not be granted where the Secretary of State has reasonable grounds to believe that the applicant is not in control of funds or that the money were acquired by means of conduct which was unlawful in the UK or would constitute unlawful conduct if it occurred in the UK; or where the character, conduct or association of any third party which contributed to the specified funds is such that makes approval of the application not conducive to the public good.
The changes to investment requirements will only affect new entrants to the investor route. Those who applied for investor visa prior to 6 November will be subject to transitional arrangements which will preserve the requirements as they stood prior to 6 November.
However, the changes in the rules relating to the discretion of the Secretary of State to refuse Tier 1 investor applications on the grounds of the origin of funds will apply to all independently of when the applicant first entered the investor route.