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Is the Innovator Visa Failing and Stifling Immigration?

The Innovator Visa, introduced in 2019 to replace the Tier 1 (Entrepreneur) Visa, was lauded as a progressive initiative to attract innovative entrepreneurs to the UK. Yet, five years on, the scheme is increasingly criticised for falling short of its ambitions. Rather than fostering innovation and encouraging talented entrepreneurs to choose the UK as their base, the Innovator Visa is often seen as restrictive, opaque, and poorly executed. In its current state, the scheme risks stifling the very immigration it seeks to encourage.

The Endorsing Bodies: A Lack of Clear Guidance and Oversight

One of the cornerstone issues with the Innovator Visa is its reliance on endorsing bodies. Applicants must secure endorsement from one of these organisations, which assess whether the applicant’s business proposal is innovative, viable, and scalable. However, the criteria for “innovation” remain poorly defined.

For instance, what constitutes innovation? Is it limited to cutting-edge technology, or could it also include innovative approaches to traditional industries? The endorsing bodies appear to have significant discretion in interpreting this term, resulting in inconsistency and confusion. Entrepreneurs who are clearly innovative in their respective fields may be rejected because their business ideas do not align with the subjective understanding of innovation held by a particular endorsing body.

This lack of definition is compounded by insufficient moderation of the endorsing bodies’ decisions. There is no robust oversight mechanism to ensure consistency or fairness across these organisations. As a result, the process becomes a lottery, with outcomes heavily influenced by which endorsing body an applicant chooses.

The Chilling Effect on Aspiring Entrepreneurs

The uncertainty surrounding the endorsement process is a significant deterrent for many talented entrepreneurs. The process often feels opaque, with limited transparency around decision-making criteria and inadequate feedback for rejected applicants.

Additionally, the focus on innovation, while well-intentioned, may unintentionally exclude promising entrepreneurs whose businesses are more incremental in nature but still offer substantial value. Many potential applicants are discouraged from even applying, fearing that their ideas will not meet the subjective and inconsistent standards of the endorsing bodies.

Moreover, the lack of uniformity among endorsing bodies has led to allegations of bias and arbitrariness. Entrepreneurs who have been rejected often report feeling as though they have no recourse or means to challenge decisions, further eroding confidence in the scheme.

Suggested Improvements

To salvage the Innovator Visa and achieve its original goals, several reforms are necessary:

1. Define Innovation Clearly

The Home Office must provide a clear and comprehensive definition of “innovation” to ensure consistency. Innovation could be broadly categorised to include advancements in technology, novel business processes, and creative solutions to existing problems. This would give applicants and endorsing bodies a more concrete framework to operate within.

2. Standardise the Endorsement Process

Introducing a uniform application process across all endorsing bodies is critical. This could include a centralised set of guidelines, mandatory training for assessors, and a detailed rubric for evaluating applications.

3. Strengthen Oversight Mechanisms

A dedicated oversight body should be established to monitor and regulate the endorsing bodies’ decisions. Regular audits and reviews would ensure fairness and accountability, addressing concerns of arbitrariness.

4. Improve Transparency and Feedback

Applicants deserve clear, detailed feedback on why their applications were rejected. This would not only help them refine their ideas for future attempts but also enhance the credibility of the process.

5. Broaden the Scope of Eligibility

While innovation should remain a key focus, the visa should also accommodate entrepreneurs who bring incremental improvements or novel applications of existing ideas. These businesses often have a significant impact on the economy and deserve equal consideration.

Conclusion

The Innovator Visa has the potential to be a powerful tool for attracting global talent and fostering entrepreneurship in the UK. However, its current implementation is fraught with flaws that undermine its effectiveness. By addressing the lack of definition around innovation, improving the endorsement process, and ensuring greater transparency and fairness, the UK can transform the Innovator Visa into a scheme that genuinely attracts and supports the world’s best entrepreneurial talent.

Without these changes, the Innovator Visa risks failing not only the applicants but also the UK’s ambitions to remain a global hub for innovation and business.

If you or your connections require legal advice, please contact Jayesh Jethwa or fill out our enquiry form below.

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The Final Straw? – Key Changes to Agricultural and Business Property Relief (APR and BPR) and What They Mean for the Future of Farms

Tractors descending on Whitehall, Jeremy Clarkson up in arms and landowners across the country fearing for the future of farming. So, what’s it all about? Here’s what we think farmers, landowners and business owners need to know about the substantial changes to Agricultural Property Relief (APR) and Business Property Relief (BPR), set to take effect from 6 April 2026.

What are APR and BPR?

APR and BPR are reliefs that reduce inheritance tax (IHT) on agricultural and business assets, intended to ensure that family farms can remain operational following a change of ownership. IHT is charged on transfers of value (e.g property, savings and personal belongings) at a standard rate of 40%.

• APR historically provided 100% or 50% relief on agricultural property, such as farmland or certain farm buildings, to reduce IHT on estates.
• BPR offered similar relief for business property, such as shares in a family trading business, reducing IHT on assets outside agricultural property.

What is Changing From 6 April 2026?

£1 million relief cap

Following the Government’s Autumn Budget, the proposal is that only £1 million of an estate’s agricultural and business property will now qualify for 100% relief from IHT. If an estate consists of both agricultural and business assets, the £1 million cap will be divided between the two based on their value.

The Government have stated that this is expected to affect the “wealthiest 500 estates,” however the uproar from the farming community goes some way to suggest the widespread impact this cap will have. It remains to be seen if the clamour in Westminster will be enough to prevent this change.

Let’s consider an example:

A farmer owns an estate worth £8 million which contains a farm worth £6 million and a business worth £2 million. On the farmer’s death, the estate would be subject to the £1 million 100% relief as follows (for illustrative purposes, we are assuming that there is no available nil rate band):

• • £750,000 relief for the farm (75% of £1 million).
  • £250,000 relief for the business (25% of £1 million).

The remaining £7 million of the estate will be subject to reduced relief (see below).

50% relief beyond the £1 million cap

Once the £1 million cap is exceeded, assets will qualify for 50% relief from IHT. Assets currently receiving 50% relief will not use up or be affected by the new allowance, but any unused allowance will not be transferable between spouses and civil partners. Put simply, this results in an effective IHT rate of 20% on the value of APR qualifying assets exceeding the £1 million cap.

Using the example above, the remaining £7 million on our farmer’s estate would receive 50% relief, leaving £3.50 million taxable value, or framed differently, a 20% tax on the £7 million excess.

The inheritance tax that will be owed on the estate would be £1.4 million.

This tax can also be paid interest-free, in instalments, over a 10 period, which may help ease the financial burden farmers will now face.

Lifetime transfers and trusts 

From 30 October 2024, these new caps and reliefs will also apply to lifetime transfers made within the seven years before death, if the donor dies on or after 6 April 2026. Similarly, trusts will receive 50% relief on  ten-year IHT charges and any smaller charges when property exits the trust. This may mean that farmers could transfer large parts of their estate into a “discretionary” or “interest in possession” trust now without an IHT liability arising immediately, although relevant property charges will likely arise for the trustees.. The Government will publish a consultation in early 2025 on the detailed application of charges on property within trusts.

This means that if our farmer made a lifetime gift of his £6 million farm to his children today and then died two years after making the gift, the transfer would be charged to IHT, subject to the new reliefs set out above. However, if our farmer made the gift today and died on 6 April 2032 (i.e. over seven years since making the gift) there would be no IHT liability for his children.

Changes to BPR

BPR will now apply at 50% instead of 100% for shares in businesses not listed on “recognised stock exchanges,” such as AIM (Alternative Investment Market) shares.

What Does This Mean For The Future of Farming?

For farmers and business owners, these changes to APR and BPR are certainly unwelcome. There is a divide between the farming community and the Government, with farmers arguing that the high capital value of their estates is disproportionate to the low income that they generate. Their major concern is that the Government’s reduction of APR and BPR will result in land being sold piecemeal to meet the new IHT liability. This, in turn, could lead to estates becoming unviable and farmers having to sell up altogether.

It is more crucial than ever to seek advice on wealth protection and planning opportunities as early as possible. With an understanding of what an estate consists of, there are measures, such as lifetime gifts or the formation of trusts, which could help lessen the burden that these changes will bring.

Please do contact the Private Wealth & Tax team to understand the implications for you and/or your clients.

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Tips to Speed Up Your Commercial Property Transaction

All parties want a smooth and quick transaction. The following simple steps can make a significant impact on the speed and efficiency of your commercial property transaction. 

Landlord/Seller:

1. It is a useful exercise for your solicitors to review the title regularly and remove any entries relating to expired leases or agreements. This prevents last minute applications to the Land Registry having to be made and dealing with requisitions at a time when your solicitor should be exchanging or completing the documents. 
2. Another helpful practice is for your solicitors to maintain a concise data room with up to date title information including deeds and documents referred to in the title. This enables title information to be issued swiftly and helps facilitate the other side’s due diligence process. 
3. It is also beneficial for you and your solicitors to procure relevant consents (such as the lender’s or superior landlord’s consent) or third party deeds of covenant which may be required before completion can take place. It is important to deal with these early on especially if they relate to a third party who has little or no interest in the transaction and may not appreciate the urgency of the situation e.g. consent of the owner of a neighbouring property in respect of a restrictive covenant on the title. 
4. It is handy if the landlord has documents such as Energy Performance Certificates, Fire Risk Assessments, asbestos surveys, insurance schedule, service charge budgets and other management information readily available and even better if these are already in the solicitors’ data room. These can be issued at the outset of the transaction along with replies to CPSEs and will prevent additional enquiries being raised in this regard.
5. The lack of a Land Registry compliant lease plan can often lead to delays. This can usually be the case for lease renewals where a previous plan is no longer Land Registry compliant. A landlord and its legal team should always consider whether a new plan is required and commission it at an early stage to prevent delays.

Tenant/Buyer:

1. A recurring cause of delays which we come across is that fit-out plans are not ready to be submitted to the landlord for approval at the appropriate time. This can cause delays especially if the fit-out requires an element of structural works such as a lift or a staircase to be installed. This can also be problematic if the tenant needs to carry out certain suitability tests to floor slabs or walls in which case an access licence may be required. Having the fit-out plans ready at an early stage can significantly speed up a transaction, as it allows time to deal with any further requirements the landlord may have in respect of the works.
2. Late requests for additional rights can delay the process. If you have any specific requirements regarding signage, access, installing plant such as air conditioning units or using common areas for events etc., it is best to incorporate these into the Heads of Terms.
3. Please ensure that you confirm details of the tenant entity at an early stage. If this is a newly incorporated SPV then the landlord may well require additional security such as a rent deposit or a guarantor and therefore this can lead to further negotiations at a late stage.

Common: 

1. Execution of documents- if either party is signing by power of attorney or trustees are involved, please make sure you provide your lawyers with the original instrument at an early stage as the other side will most likely request a certified copy. 
2. If either the landlord or the tenant is an overseas entity, please ensure that you make arrangements to obtain a legal opinion by overseas lawyers at an early stage as this will likely be a requirement of either side. 

If you require assistance with a commercial property transaction, contact Aisha Anjum.

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