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The UK government is exploring special "wealthy investor visas" to attract affluent individuals and their capital, potentially as a response to concerns about wealthy individuals leaving due to tax changes. This comes against a backdrop of generally stricter immigration policies, leading to a perception that the UK is more welcoming to the wealthy while creating more barriers for less affluent immigrants.
In a bid to counter a potential economic downturn triggered by recent tax hikes and stricter immigration policies, the UK government is reportedly exploring the creation of special visas tailored for affluent foreign investors. These potential "wealthy investor visas" aim to attract individuals with substantial capital to inject into strategically important sectors such as artificial intelligence (AI), clean energy, and life sciences, ultimately boosting the Treasury's funds.
According to reports, these plans are in their preliminary stages and could involve streamlining existing immigration pathways for individuals with significant financial resources willing to invest in the UK. This consideration comes on the heels of newly unveiled immigration rules that, while intending to facilitate overseas businesses by allowing them to send double the current number of senior workers (up to ten managers for three years under the Expansion Worker route), have raised concerns about deterring wealthy individuals. Furthermore, "very high talent" visa routes for entrepreneurs and researchers in cutting-edge fields like AI are also slated for expansion.
These potential visa adjustments are being discussed against a backdrop of anxieties surrounding the impact of recent tax reforms. The Centre for Economics and Business Research (CEBR) has warned that the elimination of tax exemptions for non-domiciled residents could lead to a significant shortfall in tax revenue, potentially reaching £12.2 billion over this Parliament, should a substantial number of wealthy individuals choose to leave the UK. CEBR economist Sam Miley emphasized the precariousness of the Treasury's financial situation, stating that even a quarter of former non-doms departing could result in a net loss of tax revenue, a figure that could escalate into billions with a larger exodus.
This concern is further amplified by recent analysis highlighting a significant outflow of millionaires from London over the past decade. Since 2014, the capital has seen a net loss of 30,000 millionaires to other countries, with an alarming 11,000 leaving in the past year alone. This equates to an average of eight millionaires departing every day over the ten-year period, according to a study by New World Wealth for Henley & Partners. Factors contributing to this millionaire exodus are believed to include tax increases implemented by both Conservative and Labour governments, economic instability following Brexit, and the depreciation of the pound.
While specific requirements for these potential special investor visas are yet to be officially announced, they are expected to focus on the applicant's capacity to make substantial financial investments in key UK industries. This could involve demonstrating access to significant capital and a clear intention to invest in businesses operating within the designated strategic sectors. The government's consideration of these specialized visas signals a potential shift in approach, acknowledging the economic risks associated with the departure of high-net-worth individuals and seeking to actively attract foreign investment to bolster the UK economy.
