In in a recent blog, we gave you an introduction to the Spouse, Unmarried Partner, and Fiancé visa under Appendix FM financial requirement, including how the financial requirement is calculated.
We discussed that those who wish to rely on cash only to meet the financial requirement will need to show that they have held no less than £62,500 for a period of 6 continuous months prior to application.
In this article, we will delve into particular issues that people may encounter when relying on their cash savings.
1) What are Cash Savings?
Cash savings means money held in your or your partner’s personal bank account, which is obtained legally and not borrowed. The account needs to be a current, deposit or investment account of a regulated financial institution in the UK or abroad. The cash cannot be in a brokerage account or a betting account.
Cash savings does not include physical cash.
Furthermore, it should be noted that currency exchange rates also play a role. Where money is held in a foreign currency besides GBP, its value in sterling will be assessed based on OANDA exchange rates on the date of application. As such, where cash savings are held in a foreign currency, it is recommended that you hold slightly above the required £62,500 level to allow for a buffer for currency exchange fluctuations.
2) Who holds £62,500 in cash?
It is crucial to note that cash savings do not include stocks, bonds, other investments or trust funds. The applicant must be in possession of no less than £62,500 in liquid cash funds at the date of their visa application.
Given that it is unusual to keep such a large quantity of savings in liquid funds, particularly for a period as long as 6 continuous months, the law does, however, allow for applicants to liquidate investments held by them or their partner in order to realise cash savings of £62,500 and then make their applications. Such applicants must be able to evidence having held these investments for no less than 6 months prior to liquidation.
3) What if I own real estate?
The same applies to real estate in this case. You can rely on proceeds of sale of your or your partner’s property provided that the property was owned for at least 6 months prior to its sale and any mortgage/loan secured on the property, taxes, and legal fees for the sale must have already been paid off from the proceeds to leave at least £62,500 remaining.
If you are selling a UK property, you will need to consider taxes such as stamp duty, capital gains tax and inheritance tax. Gherson’s tax team is able to assist on such matters.
4) What about Bitcoin? What about other types of assets?
If you are looking to rely on cryptocurrencies for your application, you may be out of luck. This is because the law requires cash savings to be held in a current/savings account with a regulated financial institution. You will likely run into issues trying to produce bank statements for bitcoin held in your crypto wallet.
With respect to other classes of tangible assets, such as artworks, cars, planes, boats etc., you are also unlikely to be able to rely on their sale proceeds to demonstrate access to cash savings. The law in such cases presents two problems:
- The law for Appendix FM applications strictly defines property as “in the form only of a dwelling, other building or land”; and
- If you were to argue that these types of assets count as investments, you would need to provide specified evidence including portfolio valuation reports from a regulated financial institution, which you are unlikely to be in a position to obtain for such classes of assets.
5) Will the law change in the future?
Given the archaic structure of how the Appendix FM financial requirements operate, it may be possible that the Home Office overhauls this route in the future, in recognition of the changing ways in which people manage their finances. However, this remains to be seen and no indication has been provided by the Home Office so far. It is interesting to note, however, that HMRC has begun to give more recognition to crypto assets via their new “Cryptoassets Manual”.
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The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.
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