UK: Changes To Tier 1 (Investor)

Last Updated: 24 October 2014

Yesterday the Home Office announced changes to the Tier 1 (Investor) category that will come into effect from 6 November 2014. These changes will apply to applications made on or after 6 November. If you do not want to be affected by these changes your application must be made before 6 November.

The main changes are:

  • Minimum level of funds for investment increased from £1 million GBP to £2 million GBP
  • The full £2 million (or £5 million/£10 million for the accelerated routes to settlement) must be invested (previously this was 75%)
  • Removal of top up requirement
  • Removal of the option to use a UK bank loan to source funds for the investment
  • The Home Office has the power to refuse initial applications and extension applications where:
    • the applicant is not in control of and at liberty to freely invest the money
    • the money held by the applicant (including where provided to the applicant by a third party), has been acquired by conduct that is unlawful in the UK or would be unlawful in the UK
    • where the money has been provided by a third party (e.g. gift) and the character, conduct or associations of that party are such that approval is not conducive to the public good.

Increase in investment

Previously, investors had to show they had £1 million to invest in the UK. This has now increased to £2 million.

In addition, the Home Office now require the full investment in the permitted types of investment (UK government bonds, share and loan capital in UK registered and trading companies). Previously, investors could invest a minimum of 75% in the specified investments and 25% in a UK property, cash on deposit in a UK bank and/or other types of UK investment. The requirement to invest the money in full also applies to investors seeking to obtain settlement in the UK under the accelerated routes where they have invested £10 million or £5 million. They will now need to invest the full amounts in the specified investments.

Removal of the top up requirement

Currently, an investor must top up their investments in the UK by the next reporting period if they fall below the required £1 million. This requirement has been removed and the investor need only top up if they sell part of their portfolio at a loss. In that situation, they will need to make up the loss within the same reporting period by purchasing other qualifying investments. This change does not apply to investors who applied for their visa/residence permit before the 6 November 2014 so they are not able to benefit from this change.

Control and source of funds

This is the more controversial change and was unexpected. It allows the Home Office to effectively make a subjective assessment as to the source of funds based on the conduct and character of the applicant and the party who provided the applicant with the funds. It is not clear at this stage how this assessment will be made. Further information will be contained in the Tier 1 (Investor) Policy guidance which should be updated at the end of October. It is likely the Home Office will have the power to request further documentation from applicants to evidence their control over the funds and also as to the source of those funds.

The aim is to identify funds from tainted sources and to exclude certain applicants from applying (e.g. politically exposed persons). The control of funds issue could also impact on funds gifted to domestic workers to enable them to obtain an investor visa so they can join their employer in the UK.

Overseas domestic workers

The overseas domestic worker visa is for a maximum period of 6 months and is obtained where the worker's employer is not resident in the UK. There currently is no prohibition on the worker applying for a further visa immediately after the first has expired. However, the Home Office intend to prevent repeat visa applications in a short space of time and they will introduce changes from 6 November that mean domestic workers will not be able to use this visa for frequent and long periods of stay.


The Home Office has increased the minimum investment and required the full investment to be made without widening the permitted types of investments. This means investors have little scope to diversify their portfolios. The Home Office confirmed that they are still considering making changes to the permitted investments and they continue to consult on this. We will be participating in this consultation so please let us know if you would like us to raise anything on your behalf. Therefore there may be further changes next year, likely to be announced in April 2015.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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