Quilter International: Nearly half a million people issued British National Overseas passports

HONG KONG SAR – Media OutReach – 10 September
2021 – New data gathered by Quilter International shows that close to half
a million British National (Overseas) (BN(O)) passports were issued to Hong
Kong residents in 2019 and 2020.

Quilter International’s adviser survey
indicated that UK is one of the top three countries the clients plan to migrate
to.

A Freedom of Information request issued to
HM Passport Office found that a total of 463,116 (BN(O)) passports were approved
for issue compared to 68,914 in total during the three preceding years. The
number of passports peaked in autumn and winter 2020 with an average of 50,000
BN(O) passports issued each month.

BN(O) status is a type of British
nationality created in 1985 that people in Hong Kong could register for before
the 1997 handover to China to retain a link with the UK, but the status does
not include right to live or work in the UK. On 31 January 2021, the UK government
however opened a new route for BN(O) passport holders and family members to apply
for a BN(O) visa which allows the holder to live, work and study in the UK and
ultimately provides a route to gaining full British citizenship. This has seen 64,900
BN(O) visas applied for during the first two quarters of this year according to
the National Statistics from UK Home Office.

These statistics are consistent with the
results of a recent survey Quilter International conducted which found that 75%
of Hong Kong financial advisers interviewed say they have received more queries
from clients related to offshore investing and relocating in the last 12
months.

The top three countries the clients plan to
migrate to are the UK (91.7%), Canada (50%) and Australia (41.7%).

The surge in the number of people renewing or
applying for BN(O) passports and more recently applying for BN(O) visas has resulted
in an increase in people seeking financial planning advice specifically related
to an imminent move to the UK. However, the UK uses a different tax year and
the statutory residence test which can both cause issues because many are
unaware that financial planning should start at least one year before arriving in
the UK.

Mark Christal, Hong Kong CEO, Quilter
International says:

“Over the past two years, nearly half a
million Hongkongers have decided to renew or apply for a BN(O) passport or more
recently apply for a BN(O) visa with the hope of moving to the UK.

“For anyone thinking of leaving Hong
Kong, it is important to plan ahead especially as the UK is a vastly complex and
much higher tax jurisdiction. Careful financial planning is a must to help mitigate
significant tax liabilities that also includes wealth held across the world.
For example, the UK’s highest income tax band rate is 45%, capital gains on
residential property are taxed at 28% and for other chargeable assets is 20%.
The UK also uses a different tax year and statutory residence test which can
both cause issues unless financial planning should start at least one year before
arriving in the UK.

“There are planning opportunities to potentially
mitigate tax exposure such as holding wealth within a recognised insurance policy,
but a comprehensive wealth planning process including implementation of agreed
plans take time and therefore it is worth starting discussions with a financial
adviser sooner rather than later.”

Visit
https://bit.ly/3yRobFd  for more useful information about UK tax.