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Speaker
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Transcript
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Edward Hayes, Director, Burges Salmon
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[Music] Hello and welcome back to death and taxes a private wealth podcast from Burges Salmon, my name is Edward Hayes and I'm delighted to be joined by my colleague from our Tax and Trust team Myra Leung.
Myra is your first time on the podcast today so before we get into immigration and all things related to, why don't you give us a quick bit of background on yourself and your practice.
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Myra Leung, Associate, Burges Salmon
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Yeah, sure thank you for having me I am an associate in the private wealth team at Burges Salmon. I am originally from Hong Kong, so I speak fluent Cantonese and some Mandarin.
I am a Tax and Trust lawyer with a specialism in advising on the interactions between UK tax and immigration law so for example moving to the UK pre-immigration tax planning residence domicile settlement and naturalization.
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Edward
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Perfect well no better person then to have on today because the focus is well it's all well and good talking about the taxation of high net worth individuals who move to the UK and how they'll be treated once they're here but obviously that slightly begs the question of well how do they come here in the first place and ever since the investment Visa was removed for new applicants back in 2022 obviously for some people that question has become more complicated so if you're happy Myra could you sketch out which are the key immigration routs that high net worth individuals and their families should be considering when they're first thinking about coming to the UK.
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Myra
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I always start with a question why are you moving to the UK because I think the client should choose an immigration route that serves the purpose of their move and not the other way around so usually they might have some sort of connections with a UK so we always start with well whether they are eligible for citizenship and there are five ways of getting British citizenship so adoption, Birth, by descent, naturalization or registration we can talk about them in a bit more detail later so that's the starting point usually they've got a connection with the UK.
If they don't qualify for citizenship then we look at whether they've got previous residents in the UK which is why a lot of people want to come to the UK because they lived here before they studied here before and they want to come back so we look at whether they are eligible for indefinite leave to remain which is also known as settlement or permanent residence if they're not eligible for citizenship or permanent residence then we look at the Visa route which we talk about because that's their kind of plan C so to speak and the key Visa categories that are available apart from the investor route which are no longer open to new applicants are ancestry so if you have a UK born grandparent and you are a commonwealth citizen then you can come into the UK under the UK ancestry Visa route or the family route so if you are a fiancé, a married partner, partner child of a British citizen or someone who settled here then you can come under the family route and then another one is a slightly newer option is called the innovator founder route so is pretty much a combination of the various previous incarnations so start up innovator Visa, graduate entrepreneur so they've relabelled it as the Innovative boundary route for people who've got this new business idea that they want to develop in the UK and setting up a company etc.
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Edward
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Myra that's a really helpful starter and let's dig into that kind of new Visa in a second but actually I think one point you said that would struck me is that almost our starting point as advisers is in some ways the opposite of I think how clients often feel about it in that we start from well could you be a citizen already effectively you do you not even need a visa can we get you in that route if you if you're not eligible for citizenship are you nevertheless eligible for indefinite leave to remain and again you know wouldn't need to go down the Visa route whereas I think a lot of clients probably start by thinking right which Visa can I qualify for.
And so it's quite I think helpful to stress that point that actually the way we work out whether a client has access to the UK and how they might access the UK is probably in some ways the reverse of how many people think about it when they're coming to this completely fresh.
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Myra
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Yeah totally which is why I said the first question I ask is why are you coming to the UK so we can get into their background and their intentions a bit more which tie into the tax piece that we'll talk about in more detail later so I mentioned the various categories depending on you know why they want to come to the UK the other ones are less relevant for high net worth individuals but I'm going to still mention them anyway so you've got the study visit Visa or the work visa.
The work visa is becoming increasingly important now that the investor visa route is gone because when you have clients who are for example Senior Bankers or if they are senior investors if they can't qualify for citizenship indefinite leave to remain or other Visa routes then a lot of the times they will try to get in through the work visa route because they are already associated with a UK business or they are planning to set up a UK entity so that's becoming increasingly popular whether that's suitable for everyone that's a different question.
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Edward
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Thank you and if we because lots of people understand obviously the concept of citizenship and many will have come across the idea of indefinite leave to remain is it possible to give a really high level summary for clients as to if you are a high net worth individual and you're looking at this as a blank sheet of paper think how do I start if they're trying to work out am I likely to be able to get citizenship or likely to be able to get indefinite leave to remain could you list out kind of just a few bullet point criteria maybe not everything I appreciate that it's far more nuanced and we can't go through all of the possible ways in which you may or may not be able to get citizenship or or ILR but could we point clients towards kind of some of the key things that might give them a good idea as to whether that's likely to be an option or not?
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Myra
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So, let's say the client has no UK connections whatsoever so for example no UK born a parent or grandparent then most people they would have to hold one type of visa for at least 5 years and be resident in the UK for 5 years before they can get indefinitely to remain.
It's important to point out that residence for immigration is different for residents for tax so interestingly under immigration law you look at absences rather than presence in the UK so unless you've been outside of the UK for 24 hours then you don't count that as the day of absence which is different to the midnight test and the statutory residence test for UK purposes.
So I mentioned that you have to hold a Visa for at least 5 years and be resident in the UK for 5 years and during those 5 years you can't be absent from the UK for more than 180 days in any 12 month period so it's a rolling period calculation which is slightly different to the previous rules and clients tend to get caught out on it because they don't think about residents from an immigration perspective because they've had tax advisors elsewhere for example previously or they are not familiar with the most recent rules so that's the key thing to watch out on is that they are now stricter with immigration residents before they can get indefinite leave to remain and provided that you haven't been in breach of like immigration rules or if you haven't had any like convictions for example that a lot of people will qualify for indefinitely to remain provided that they've held the same visa for 5 years and they've been immigration resident in the UK for five years if the visa leads to settlement so apart from visit visa usually.
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Edward
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And as for citizenship, ILR you're only going to be eligible for that generally speaking if you've had this period of residence so should be quite clear to most people whether that's likely something they consider or not those who may not currently have British citizenship and might be eligible for it what are the as you outlined at the beginning some of the the roots to that but in terms of things that we see in practice that maybe clients haven't realized they' be eligible for for a citizenship are there kind of common linking factors there where you see actually clients in this position often haven't clocked that this is an option for them and we're able to kind of give them the good news there.
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Myra
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So interestingly I've got one matter on my desk so sometimes it's obvious if you were born in the UK then like a lot of people would qualify for citizenship by birth or if you have indefinite leave to remain you've been here for 5 years then you stay here for another year then you get citizenship by naturalization but we've done two recently is actually citizenship by registration based on historical legislative and fairness it sounds a bit odd in the sense that it's not something that's common for high net worth individuals you would think but actually we relied on that because the client had a British connection so for example a UK born grandparent but actually citizenship doesn't pass down to generations outside of the UK so we have a lot of clients with UK connections but a few generations that go rather than the most immediate generation like for example parent and we relied on it because the client missed out because of the recent changes to the law whereby previously if you were an unmarried woman you could impact on citizenship in the same way if you have a child outside of the UK so that's quite interesting and people don't often think about how they could get citizenship and again I lead back to my initial question why do you want to come to the UK we can usually pick out different ways of you know obtaining UK immigration status rather than just going for a Visa and previously invested Visa just because the High Net Worth individual is about the individual circumstances.
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Edward
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Perfect well and that's I think a key message, isn't it? Is that don't discount the citizenship rout without thinking about it and particularly without speaking to a qualified adviser like yourself you can talk to these slightly more esoteric routes into citizenship which wouldn't maybe occur to to all clients or or intermediaries so thank you for that so I think we've given people a pretty good understanding of when ILR and when citizenship might be an option if we go back to someone who can only go down the Visa route and you they don't have an existing visa for the UK and they're starting now with how do I come in if you could go back through maybe some of those Visa options that are most relevant and that we see most frequently for high net worth individuals and their families and sketch out again high level but you know what are the key criteria qualify for those and then after we've done that I think it'd be really good to go through some practical tips and and advice because we've all come across instances where actually people thought they were on a onto something good and actually for some either practical or technical reason slightly fell afoul of the home office's rules.
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Myra
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So, as you mentioned the tier one investor route was closed to new applicant only two years ago so we've seen interesting cases in the last two years I would say most people tend to go for work visa because they're actually doing some sort of work in the UK.
For example as I said like a Senior Banker or um someone who starting a business in the UK so they tend to go for that or another option is Global Talent Visa if they are a leader in their field for example if you have a significant business experience in the tech sector then it's a potential route for them but again there's only let's say for the tech sector is not applicable to everybody so between these two you can usually find a way for a client who's intending to do some sort of work in the UK I know um we discussed um this recently of people setting up a family office for example and trying to sponsor clients through the family office and the work visa route I would say that it doesn't work for everybody in the sense that if you weren't planning on setting up a family office in the first place then it might not be the best Visa route for them because when you apply for a sponsor license for the business you have to meet certain criteria the business would usually be up and running.
So it's more difficult for let's say a High Net Worth individual to come to the UK set up a family office and then getting a sponsor license to have all the documents ready after that they get the sponsor license then they can issue certificate for let's say family members to come to get the work visa but then you also have the ongoing compliance issues so it's not just about you know getting a sponsor license for the family office or getting the work visa for like the family members to come to work in the UK you have to make sure that they actually do the work they said that they are intending to do in the application but also the ongoing compliance so you have to report to the home office of changes and the family office has to be running you can't just set up like a shell company and then like not do any actual business.
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Edward
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So a family so a family could set up a business in the UK whether it's a family office or other family business and use that to help family members into the UK but they just need to be very careful that that has genuine substance and is kind of genuinely operating separately to its role bringing in family members and that that's going to be a long-term solution which will I suppose stand up to scrutiny as and when the home office look at it again, is that right?
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Myra
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Yeah exactly is actually something that we discussed amongst the immigration practitioners some advisors are almost selling this as a package and the more they do that the more the home office will scrutinize this to make it more difficult for people who are genuinely eligible to come under this route in this way to come to the UK so that's why again why they're coming to the UK is this the right route for them I think that's the kind of key question.
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Edward
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Understood so you've got the for those who are coming to the UK to work you've probably you've got the worker visa basically and the Global Talent Visa as possible options for those who are coming to start a business you mentioned the innovator visa and I'm aware that's got quite a few you know different criteria associated with it let's just go through the key ones you if people are trying to get a broad idea of is that something that could they could be eligible for if you could just broadly summarize kind of who it's really targeted at?
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Myra
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I guess it's in the name so they recently changed it to innovator founder Visa so you've got the Innovation piece so to qualify you have to have a new business idea and the business idea has to be new as I said Innovative viable and scalable the key requirement is that you have have to get an endorsement from an endorsing body first so the last time I looked there were only four endorsing bodies and when they started they had a really long list of endorsing bodies but now there is only four of them so you have to approach them and say look I've got this Innovative idea can you endorse me and then this one of these external bodies will assess your application to actually confirm whether or not your business idea meet a criteria before you can even apply to the home office for a Visa so it hasn't been that popular since it was introduced because who are these endorsing bodies and how are they qualified to assess the eligibility of the business idea that put a lot of people off that's the first hurdle before you even get to the Visa bit.
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Edward
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Understood I'm presuming the time lag as well associated with having to go through that process before you even submit an application to the home office.
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Myra
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Yeah, so it creates a lot more uncertainties actually it's harder for advisers to tell the client whether or not they're likely to get the visa if we don't really know whether the business idea will be approved by one of these endorsing bodies.
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Edward
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Understood so to quickly recap on the on the Visa options that you know clients can consider basically we moving to the UK to work then the skilled worker visa or the Global Talent Visa may be something to look into if you're moving to start a business then technically the innovator founder Visa is available to you but in practice there are several hurdles to kind of jump over to make the most of that and then if you have any historic family connections to the UK it's always worth thinking about the ancestry Visa as well are there any others that you know we think we should be quickly covering off before we move on to some of the practical matters?
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Myra
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Yes I wasn't sure whether I wanted to mention this but I think I should it's the EU settlement scheme and the reason why I was hesitant because the deadline to apply was actually the 30th of June 2021 although the home office are still technically accepting late applications but they're only for people with reasonable grounds to apply late.
I've got one on my desk and we've helped clients previously to make late applications but the longer you wait the less likely you'll be eligible but it's really for EU citizens and the family members who lived in the UK before the 31st of December 2020 then they can they'll be eligible for the EU settlement scheme so whenever you have a client with EU connections and previous residents in the UK it's always good to look at that because as we said earlier on in the podcast you know you want to look at citizenship and indefinitely to remain first before looking at the Visa options because you know there not as many options with high net with individuals so EU settlement scheme is another option but the later you apply the harder it is.
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Edward
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Myra, thank you I think it's a fantastic summary of how people might be able to move to the UK and be eligible to remain here I think in terms of the practicalities are there any kind of tips or traps that you've seen people either fail to take advantage of or fall into that you like to you know like to speak to listeners about?
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Myra
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I guess I have two tips and one trap so starting with the tips the first one is actually knowing when and why to engage an immigration advisor or lawyer I'm not selling myself short here but a lot of people make applications without having an external adviser or a lawyer so it's important to know when and why you need one so for example if the individual doesn't meet all the requirements or if they have advert immigration history in the UK or elsewhere or if there's a really tight time frame or if there are any potential grounds for refusal that's definitely the time to get an immigration advisor but also if they have wider planning concerns for example tax which we'll move on to later then it's definitely something to consider.
The other tip I've got is actually be organized it sounds really obvious but like the preparation and application itself become much more straightforward and less time consuming if the applicant and the dependents can be organized and a lot of my work is actually project management to make sure that the application is in the best shape possible to make sure that everything um is ready for the home office to review and approve so those are the positive tips what is the trap? The trap is actually providing too much information to the home office and there are several reasons why I say that because if you provide too much then you are at the risk of providing irrelevant information that might detract the case worker from looking at the actual relevant information and for example like mandatory documents might be missed or forgotten if you're focusing on the irrelevant stuff and the third reason why providing too much is a major trap is that there are greater risk of mistakes and inconsistencies if you provide too much information because you just don't have the time to look at everything in DET.
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Edward
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And speaking of inconsistencies I think that's where there's particular value is know and if you are moving to the UK and you are speaking to the home office on one side and HMR on the other you need to be very careful to ensure that you're being consistent in what you're telling both of those authorities because although they do not speak to each other seamlessly there is overlap there and anything you record in writing or you know make making a statement or anything like that is basically on the record and you know someone who advises a lot on domicile and other statuses which are heavily influenced by statements people make about their intentions and where they might be you know I regularly see that and HMR I've always enormously appreciated with being able to come and talk to you about right from an immigration perspective you know what will this mean and what's possible.
We deal with quite a few clients don't we where you they've had immigration advice from other parties who've said right you need to do XY Z over the coming years to kind of guarantee your immigration position they then come to us tax advice and we've said that we actually from a tax perspective you want to almost be doing the opposite of that and you're often trying to balance somewhat competing um desires there on the immigration and tax side and have you I mean obviously we've worked a lot together on matters with both immigration and tax have you have you seen anything you'd like to kind of pass on to people in terms of what are the most important points from your perspective when you're you dealing with that crossover.
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Myra
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I think there are two key points one you mentioned that the authorities don't always talk seamlessly with each other but they do talk with um for example um the increasing reporting obligations for example like worldwide not just within the UK we had a few cases in the UK uh we don't have time to go into detail whereby the applicants were overstating their income and earnings for immigration purposes to show that they meet the financial requirements but for some reasons on the tax return their figure of their income and earnings were much lower than what they submit to the home office presumably trying to pay less tax and they got into trouble and like the authorities are well aware of um this now because of these cases that's one thing the other thing as you said is intention we had one whereby the applicant said that she couldn't live anywhere else apart from the UK for immigration purposes in her previous application before they she instructed us at the same time she was coming to us for uh non-dom advice trying to claim that she was domicile with no intention to make the UK her permanent home now the two weren't compatible so we had to manage her application very carefully and that was tricky but it's also what I really enjoy doing the interaction between um UK tax and immigration law.
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Edward
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And I suppose helping clients we do this on tax as well and it's always clients sometimes have an understanding of what they think they need to say to get a good outcome and actually helping them understand often that no you just need to say what's accurate in the right way and that's kind of the best way forward.
Well, thank you Myra that has been enormously helpful. I think to quickly sum up for the listeners you when you're looking at moving to the UK don't just look at Visa options also do look at the possibility of claiming citizenship and or already being eligible for indefinite leave to when you're looking at those Visa options and you have now I think it's fair to say fewer options available than there were in previous years but there are absolutely things worth exploring and we can help guide people through that and then when you're going through the process of applying once you've kind of worked out your route into the UK do be very careful as to exactly what you're saying to whom and in what level of detail because once you said something you can't take it back and you need to be very careful in how you interact with your authorities in the UK to make sure you're basically painting the best picture possible the private wealth team here at Burges Salmon obviously has a wealth of experience advising individuals and families with their immigration and tax planning needs and you know Myra is a perfect person to talk to on that front.
But I'll say now thank you very much for listening to this episode of death and taxes the private wealth podcast from Burges Salmon you can listen to our previous episodes and get in touch with the team at Burgessalmon.com or on our LinkedIn page.
Don't forget to subscribe to stay up to date with our latest podcast and we look forward to speaking to you again. Thank you very much!
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