According to Her Majesty’s Revenue and Customs (HMRC), a High Net Worth Individual (HNWI) in the UK is someone with assets valued over £10 million. Among the many reasons that the UK is such a highly desirable destination for High Net Worth Individuals (HNWI) are its robust legal framework, sophisticated financial services, and the availability of investment opportunities. If you are considering investing in the UK, this article explores the range of legal services UK legal protection for high-net-worth individuals, allowing you to focus on what you do best: running your business interests and managing your investments.
The importance of legal and compliance support for HNWIs
Compliance with the rules and law, whether tax, financial, environmental, immigration, and employment, is vital for ensuring that your investments, assets, and business interests are protected and that you are within the law at all times. While the UK’s environment for investment is extremely favourable, the tax laws and immigration rules here are always changing, which is why many HNWIs and UHNWIs seek advice from professionals in their respective fields to help them. Maintaining compliance with the regulations and laws of the UK will make sure that you avoid regulatory scrutiny, penalties, or legal disputes, any of which can significantly harm your personal wealth and reputation.
UK legal services for UHNWIs and HNWIs: tailored solutions for wealthy investors
HNWIs and UHNWIs with interests in the UK typically rely on the services of UK-based law firms, tax advisors, and financial advisors to help them understand and handle the many unique challenges that wealthy individuals face. UK law firms provide assistance in a range of practice areas, including:
- Estate planning – Solicitors specialising in this area help HNWIs to ensure that their wealth is passed down to their families and future generations in a tax-efficient manner. There are several ways that this can be done, including forming trusts, entering into a prenuptial or post-nuptial agreement and drafting a Will.
- Private client law – Private client lawyers specialise in helping HNWIs with complex areas of law, including inheritance and family law.
- Commercial dispute resolution – The reality is that with substantial investments and business interests comes the risk of disputes. Legal support for resolving commercial disputes is vital to prevent protracted litigation that can drain resources and damage reputations. Many law firms in the UK offer commercial dispute resolution services to tailored services to help resolve commercial contract disputes, IP disputes, and international jurisdictional disputes.
- Contract law – A UK-based contract lawyer can help you ensure that any contracts you enter into, whether they be related to acquisition, non-disclosure, employment, property acquisitions, or venture capital investments, are legally sound and risk-free.
UK immigration compliance for investors and HNWIs
Two common immigration routes for wealthy individuals include the Self-Sponsored Visa and the Innovator Founder Visa. The old Investor visa is no longer available in the UK.
The Self-Sponsored visa route allows individuals to obtain residency by setting up a UK business and sponsoring themselves. Crucially, it provides a pathway to permanent settlement in the UK. It is important to find a UK immigration lawyer who specialises in the self-sponsored route, as not all do. At AY&J, we can advise you on how to meet the eligibility requirements, assist you with setting up a business in the UK, apply for your sponsor licence, and then assist you with your visa. In addition, we can assist with your sponsorship compliance, ensuring that you remain within the rules and are able to retain your licence for as long as it is needed.
The Innovator Founder visa is another extremely popular option for investors and HNWIs with a unique, innovative, and viable business idea for the UK. If you choose this route, you will need to have your business plan endorsed by an endorsing body before applying for your visa. We can assist you with each stage of this process. Once you have your visa, you can apply for permanent settlement after just 3 years.
Immigration lawyers can assist you with your immediate visa and other immigration law requirements, as well as those of your family members. And, importantly, they will ensure that in the medium and long term, you are on the right path towards settlement and citizenship.
UK Tax compliance for non-domiciled residents – Avoiding pitfalls
One of the key benefits available to HNWIs in the UK is non-domicile tax status, which can provide significant tax advantages. ‘Non-dom’ status allows HNWIs who live in the UK but are not domiciled in the UK to avoid tax on their offshore income and profits until they remit the funds to the UK. This is why it is called ‘remittance basis’. It is essential to keep accurate documentation and adhere to reporting requirements to avoid penalties from HMRC.
It is important to note that the existing non-dom tax regime is to end in April 2025. For this reason, it is essential to get professional guidance to understand how this might affect you. Under the new rules, the HMRC will be looking not at whether a person is domiciled in the UK but whether they are a resident here.
However, the new rules will provide some relief during the first four years. Where an HNWI has not been resident in the UK in the past 10 years, they will benefit from the ‘foreign income and gains’ regime for 4 years. This means that during this period, an HNWI can choose not to pay tax to HMRC on their non-UK income and remit those funds to the UK without triggering a taxable charge. Once the 4 year period ends, they will need to pay tax on their international income.
A tax advisor will be able to explain the rules as they pertain to you and explain how you can best minimise the impact on your wealth and assets.
Protecting wealth from litigation, creditors, and unforeseen risks
As a HNWI, you want to protect your wealth from the possibility of litigation, claims by creditors, and unforeseen risks. Such risks can be avoided by setting up trusts, buying insurance, and instructing litigation support.
Trusts are one of the most common ways to protect family assets from potential claims, such as those arising from divorce, bankruptcy, or creditor actions. A trust Solicitor can advise on creating offshore or onshore trusts to maximise the security of your assets.
For HNWIs with valuable properties, businesses, or personal assets (e.g. cars), insurance can offer an essential layer of protection. Due to the range and complexity of insurance products and coverage available in the UK, it is essential to seek professional advice. If necessary, insurance companies can create bespoke insurance protection based on your needs and risk profile.
Finally, to protect you in the event of legal disputes, it is important to have an experienced and trusted litigation lawyer at hand who can proactively help you manage risks, defend against claims, and protect your interests in commercial or personal disputes.
Data privacy and cybersecurity for HNWIs – staying legally compliant
Another area which is often overlooked by HNWIs seeking to invest in the UK is how to remain compliant with data privacy laws. The reality is that cyberattacks targeting wealthy individuals continue to rise, making data protection a critical aspect of legal compliance. As an HNWI, it is advisable to do all you can to adhere to the UK Data Protection Act and General Data Protection Regulation (GDPR). This is especially so if they hold global assets or operate businesses with access to personal data.
Specialists in IT and data protection and data protection law can help you put in place the necessary measures to mitigate the risk of cyber security attacks (e.g. phishing, hacking, and ransomware attacks) and ensure that you are compliant with UK data protection laws. This includes safeguarding personal information, securing business data, and preventing breaches that could result in reputational damage or fines.
Navigating UK corporate law for HNWIs – Establishing and protecting businesses
Running a limited company in the UK offers considerable benefits for HNWIs, including the fact that they are personally protected from the company’s liabilities. This protection comes at a cost, however: oversight, transparency and governance.
Incorporating a UK-based company must be done correctly and in compliance with the rules defined by Companies House (the registrar of companies in the UK). In addition, corporate governance rules, financial regulations, and reporting requirements must be met. Commercial lawyers and company formation specialists assist HNWIs with business formation, ensuring that the structure is legally sound and tax-efficient.
HNWIs who hold directorships in UK companies or invest in UK businesses must comply with their duties and obligations. This includes meeting obligations under the Companies Act, adhering to fiduciary duties, and maintaining proper financial records.
Future trends in UK legal and compliance for HNWIs
Looking ahead, several regulatory changes may affect HNWIs in the UK, particularly in areas such as immigration, tax law, and financial compliance. Post-Brexit immigration rules are evolving, and further restrictions or changes to visa requirements may impact HNWIs. In addition, the UK government is tightening the rules for non-domiciled residents and offshore trusts. For these reasons, it is essential for HNWIs to seek ongoing advice to remain compliant while optimising their tax position.
Final words
Legal and compliance support is essential for HNWIs navigating the complexities of UK law, from immigration and tax to asset protection and cybersecurity. By securing expert guidance, HNWIs can safeguard their wealth, minimise risks, and ensure long-term compliance with the UK’s evolving legal framework.
A Y & J Solicitors is a specialist immigration law firm with extensive experience with all types of visa applications. We have an in-depth understanding of immigration law and are professional and results-focused. For assistance with your visa application or any other UK immigration law concerns, please contact us on +44 20 7404 7933 or contact us today. We’re here to help!
