Meet the Warringtons
Eric Warrington owns and manages a successful upmarket construction company, EW Limited. Many of the large and luxurious houses Eric’s company has built have featured in glossy lifestyle magazines alongside their celebrity owners.
Eric has two children from a previous relationship, Peter and Jane, now in their twenties. Eric is discrete about his wealth as he does not want his children to be spoiled (he has though bought them each a modest flat and paid for their private education and university expenses).
Eric met Jing Xu at the Chelsea Flower Show in London. Jing is many years younger than Eric and though born in Singapore was educated in England. After graduating in History of Design at the V&A / Royal College of Art, Jing established an interior design business in Hong Kong and, drawing on her unique perspective of Asian and Western cultures, rapidly became one of the most sought-after designers there.
With their overlapping business interests and common passion for finding innovative ways to incorporate natural and organic elements into their work, Eric and Jing fell in love.
Jing immigrates to the UK
After a couple of years shuttling between Hong Kong and England, Jing decided to move to England to be closer to Eric.
As Jing is a Singaporean national, and so not a citizen of a country within either the European Union or the European Economic Area, she needs a visa to live and work in the UK.
Jing consulted a lawyer specialising in high net worth immigration and concluded that the Tier 1 Investor Visa by way of a £2m ($2.6m, €2.3m) investment was her best option, due to the greater freedom offered, high degree of flexibility and relatively small number of ongoing requirements.
The Tier 1 Investor Visa was designed specifically by the UK government to attract high net worth immigrants like Jing to invest in the UK. Originally there was a minimum investment threshold of £1m which was increased to £2m in November 2014.
Tier 1 Investment Visa
A Tier 1 Investor Visa is often the most attractive option for high net worth persons wishing to relocate to the UK. It allows the holder to live and work (if he or she wishes to) in the UK.
The Visa is initially granted for three years and four months but an application to extend can be made at three years and before the valid Visa expires, giving the Visa holder a further two years of leave to remain in the UK.
After five years, the Visa holder may be eligible to apply for permanent residency provided that the requirements for indefinite leave to remain (i.e. permanent residency) are met. These include residing in the UK for at least half of each year.
For quicker routes to permanent residency, the Visa holder has the option of investing £10m and making the application after two years of being in the UK; or investing £5m and making the application after three years of being in the UK.
There are strict rules on how the investment funds must be invested, aimed at stimulating growth in the UK as directly as possible.
- For a Tier 1 Investor, the investment funds, eg £2m, £5m or £10m must be invested in UK gilts, UK bonds, or UK companies within 90 days of the grant of the Visa. For investments in UK companies, the investment can be way of share capital or loan capital but must be in active trading companies that are registered in the UK and are not principally engaged in property investment, property management or property development.
- The previous requirement for the Visa holder Investor to top up the investment funds where their market value dropped below the minimum threshold was removed in 2014. Investment advisers can therefore advise Visa holders to invest in a broader range of investments without being restricted to a static portfolio comprising only UK gilts or bonds.
- Investment advisers must however ensure that the book value of the investments does not fall below the minimum investment threshold. Care must therefore be taken when investments mature or are sold to ensure that the base cost of all the investments within the portfolio remains above the minimum threshold and topped-up when necessary.
Jing sold her interior design business in Hong Kong for just over £2m. With her lawyer’s assistance, Jing successfully obtained a Tier 1 Investor Visa and set up a new company in the UK to carry on her interior design business, into which she injected £1m of working capital. Advised by Eric’s investment adviser, she purchased just over £1m worth of government bonds. Jing therefore satisfied the £2m investment requirement.