We are by now familiar with the change in the Rules, increasing the minimum level of investment to £2m which came into effect on the 6th November. The one requirement / rule change which appears to be causing an element of confusion is the requirement of 'maintaining the sum' Anyone who entered prior to the 6th November in the Tier 1 Investor category is familiar with the requirements that a) at least 75% of the investment funds should be invested into the permitted categories allowing for the purchase of property / house or simply retaining living expenses on deposit and b) Should the level of investment drop in a reporting period as a result of the markets, then one was required to make up the shortfall by the next required period.
However, with the wind of change comes uncertainty and this is leading to some anxiety as to the 'maintaining the funds' requirement. The new Rules ( if you entered the UK after 6th November 2014 ) require that the FULL level of the £2m investment requires to be made by contrast to the previous requirement of the 75%. However, should the level of the investment fall below the £2m then the investor is no longer required to make further investment to balance the reporting period.
But, should the shortfall result because the investor sells or withdraws money from the investment pool, then further investment will be required to balance out to 'maintain the level of investment' at the original £2m fund.
It all gets abit daft, frankly where people hold investments in excess of the £2m as they will regardless still be required to even out the investment pot at £2m, 'maintaining the level of investment'.
It certainly will create more work for accountants and FCA's as a result for those who invest in the markets especially at vulnerable and volatile periods given the additional evidence which will be required. But for those investing in one major Company / investment project and retaining that investment sum, the path towards extensions seems simpler where the level of investment remains constant.
The Home Office Tier 1 Investor Guidance is updated and to be found here.