Hong Kong citizens acquired residential properties in London totalling over a billion US dollars in the nine months since the UK government announced it was changing the rights attaching to British National Overseas (BNO) status in Hong Kong and opening a new pathway to British citizenship.
According to property agency Benham & Reeves, Hong Kong residents bought 1,932 units – or 4% of all London homes sold – between July 2020 and March 2021. With London house prices averaging £496,269, said director Marc von Grundherr, this totalled a conservative £959 million. In the same period a year earlier, Hong Kong buyers had spent £377.4 million, accounting for 1% of London homes sold.
The new BNO Visa became available to BNO citizens and their close family members as of 31 January 2021. It permits Hong Kong citizens with BNO status to come to the UK with their close family members for five years. After five years of residence in the UK, they will be entitled to apply for settlement – termed ‘indefinite leave to remain’ – and after one further year of residence to apply for British citizenship.
BNO Visa holders are able to work or study freely in the UK, including applying for higher education courses. Although they will not generally be entitled to claim benefits, they will be able to use the UK National Health Service (NHS).
There is no limit on the number of eligible people who can come to the UK under this new visa, which was introduced in response to the application by China of the National Security Law to Hong Kong on 30 June 2020. The UK government said there were around 2.9 million BNO citizens in total and estimated that, with dependents and members of family units, a further 2.5 million Hong Kong residents may also qualify.
The government estimates the between 123,000 and 153,700 Hong Kong citizens with BNO status and their dependents are likely to come to the UK in the first year after applications open for the new visa, while between 258,000 and 322,400 Hong Kong citizens with BNO status are likely to purchase a home in the UK over the next five years.
Any BNO citizens in Hong Kong who are looking to relocate or invest in the UK will need to ensure that they have a clear understanding of the UK tax system and should make pre-arrival tax planning a priority. UK income tax rates of up to 45% are generally much higher than those in Hong Kong, while the UK also levies tax on capital gains and inheritance.
A new surcharge for stamp duty land tax (SDLT) was introduced on 1 April this year for buyers of residential property in England and Northern Ireland who are not UK residents. This will add 2% to all rates of SDLT payable on the purchase of residential property.
Moving to the UK can be a daunting process for you and your family – even more so if you run your own business. In addition to the logistical, financial and emotional pressures, there are a number of practical issues that will also need to be addressed: location, accommodation, security, business set-up, employment, banking, registrations, documentation, insurance and access to healthcare or education.
With offices located in both Hong Kong and the UK, and a wealth of expertise and experience in both jurisdictions, Sovereign is well-positioned to guide you throughout the journey – from application through to settlement – and to resolve any issues you might encounter along the way. We are here to help make the process as simple as possible.
For further information on the BNO Visa and moving to the UK, please download and refer to our Sovereign Service ‘checklist’ for BNO visa applicants by clicking here.