There are a few ways you can tailor your immigration and financial life to get the most out of your UK move if you are an HNWI looking to relocate. You can get immigration routes for wealth management in the UK, and tax plans for wealth protection and growth. In this article, we’ll go over the major UK visas for HNWIs, the benefits of the taxation system, inheritance tax planning, tax compliance, and long-term wealth management.
There are Top UK Visa Options and Tax Benefits for HNWIs.
The UK has multiple visa schemes for HNWIs that both provide residence and tax exemption. Two routes are among the most used:
Self-Sponsorship Route
Self-Sponsorship: this is a more recent immigration route in which HNWIs can sponsor themselves by starting up a UK business. With this route, you can obtain UK permanent residency without the employment or employer sponsoring you. On this plan, HNWIs have access to the UK’s favorable corporation tax rate and investment allowances which lower their tax liability.
Innovator Founder Visa
The Innovator Founder visa is perfect for business people with a creative business concept to enter the UK. You have to get your business plan approved by an approved UK organization to apply. The visa lets you start your own business in the UK and also access the UK’s corporate tax laws and dividend tax policies instead of regular income tax. Like the self-sponsorship path, you can use tax exemptions on the Innovator Founder visa too, like the annual investment allowance.
Both of these paths can lead to permanent residence but both offer a special tax relief to allow you to keep more of your fortune in the UK.
Tax Exemption: HNWI Key Tax Savings from Nondomicile Tax Status.
A tax saving that is very important for HNWIs moving to the UK is the non-domicile (non-dom) tax status. Non-doms have the right not to be taxed on foreign income or profits, as long as the money is not imported into the UK. It is a remittance basis. But the bad news is that this status will end on 6 April 2025.
Tax Rules Changes from 2025.
From April 2025, the remittance system will be replaced by the residence status system. These changes will be effective from the new tax year and for people who have already been resident in the UK for up to four years. You will still be able to transfer income and gains out overseas in the UK untaxed during this time, although not for some tax-free allowances. After these four years, you will be taxed on worldwide income as all other UK residents.
Non-Dom Inheritance Tax (IHT)
At the moment, non-doms only incur UK inheritance tax (IHT) on property in the UK. You keep non-dom status, so you are not domiciled in the UK, but reduce your IHT burden on overseas property. But from April 2025 the rule will change, and if you’re a UK resident for 10 years or more your worldwide property will be liable for UK IHT even if you don’t live in the UK.
Inheritance Tax (IHT) Planning: How To Keep Family Wealth.
Inheritance tax can be a particular worry for HNWIs because estates above £325,000 are subject to 40% inheritance tax. But you can reduce your IHT obligation and leave your money to the descendants if you do your homework. Voici some standard IHT-minimization tips:
Using Trusts
Many HNWIs pay IHT less with trusts. When you put things in a trust, those things are no longer part of your estate and so may not incur inheritance tax. Trusts can also be helpful for leaving money in trust for the future to people without any risk and where assets will be preserved and handled as you wish.
Family Offices
Another mechanism HNWIs use is a family office to manage their wealth, investments, and succession. If you have a strong team of financial and legal advisors, you can organize your wealth so it’s less tax burdensome to you, and it passes easily to your beneficiaries.
There are many more ways to mitigate inheritance tax so it is a good idea to speak with a financial advisor who can design a plan for you and your particular situation.
HNWIs and UK Financial Regulations and Compliance Guide
The UK has very rigorous financial laws that protect you from money laundering, tax avoidance, and financial crimes. HNWIs need to make sure everything they invest in and finance is in line with UK law. It means filing foreign assets and income on the CRS and sending documents to prove the money came from a legitimate source.
Having advisors with experience in UK financial regulation is important to ensure you comply while still getting the tax relief HNWIs get.
Legacy and Estate Planning to Safeguard & Ensure Long-Term Capital Security
It is not just about lowering taxes that you need to store your wealth over generations; legacy and estate planning is critical, too. You’re a HNWI, so you want to ensure that your fortune passes seamlessly and as your family sees fit. A couple of notes:
Lifetime Gifting
One way to decrease your taxable estate is to gift while you’re still alive. This can reduce the size of your estate, and so your inheritance tax burden.
Succession Planning
And don’t forget a succession strategy. This guarantees that your successors will do what you would like with the property, and avoids family disputes. This is especially important if you have an international property complex.
Charitable Giving
For most HNWIs, charitable giving is also an estate planning strategy. Funds left to registered UK charities are IHT-free and could reduce the total tax on your estate.
You can move to the UK, maximize your tax savings, and leave your assets to the next generation if you’re smart enough. Make sure to contact a finance professional who is familiar with UK tax rules and inheritance tax planning and an immigration lawyer who will be able to explain the visa application process.
Our business at Law and Visas specialises in helping HNWIs get a foot in the UK immigration door as well as offering tax planning and financial compliance advice. With some planning, you can be sure that your wealth is not lost and your future remains in the UK.
