UK private wealth immigration: the Budget and “earned settlement” consultation

The tax changes announced in the UK 2025 Budget were less dramatic than many had anticipated (see our Autumn Budget 2025: Key takeaways for private clients - Burges Salmon).  However, from a private wealth perspective, there was even less in terms of new immigration proposals in the Budget. 

UK Budget 2025

In the 2025 Budget, the political rhetoric on immigration focuses more on asylum reform and less so on economic migration.   Similar to the 2024 Budget (see UK Budget and immigration: invest, investment but no investor visa? - Burges Salmon), whilst the Government seems keen to attract investors into the UK, it is yet to propose an immigration route which can fill the void left by the closure of the Tier 1 (Investor) visa route.

Rather than making any new announcements, the Budget mostly refers to the recent statement of changes to the Immigration Rules dated 14 October 2025: 

“The High Potential Individual route will expand to graduates from the world’s top 100 universities, while international students will be able to transition seamlessly from study to entrepreneurship through the Innovator Founder route. Updates to the Global Talent visa include reforms to make it simpler and easier for top science and design talent to access the visa and to expand the list of eligible prizes. A new Global Talent Taskforce will also help attract leading professionals in priority sectors and provide tailored support for relocation.”

Perhaps with the exception of Tech Nation who endorses Global Talent visa applicants with proven business skills (such as leadership and/or investments) in digital technology businesses, there is no obvious visa route for entrepreneurs or investors to come to the UK.  This is unless they want to set up an “innovative” business under the Innovator Founder visa or the somewhat unorthodox “self-sponsorship” via a Skilled Worker visa. 

“Earned settlement” consultation 

On 20 November 2025, the Government published a document titled, “A Fairer Pathway to Settlement: statement and accompanying consultation on earned settlement” (the "Consultation").  The Consultation sets out the proposal to increase the standard residence requirement for settlement (also known as permanent residence or Indefinite Leave to Remain ("ILR")) from five years to ten years (or even 20 years in some cases).  The rationale of the proposed extended timing behind the Consultation is the spike in net migration “of an additional 2.6 million people” between 2021 and 2024.  In particular, 616,000 migrants arrived under the Health and Care visa. 

It is important to note that the following groups are not subject to the Consultation:

• individuals who are already settled;
• parent/partner/child of a British citizen;
• those who are eligible under the EU Settlement Scheme; and
• family members and holders of British National (Overseas) status. 

(As a dual British citizen and British National (Overseas) myself, I was particularly relieved by the last bullet point!)

The plan is that, going forward, ILR will be less automatic but “earned” through the “four core pillars” below:

1. character;
2. integration;
3. contribution; and
4. residence.

Based on certain “attributes”, there will be an “adjustment to baseline qualifying periods” (e.g. plus or minus from the ten years).  In short, the range of residence requirements will start from three years to 20 years.  (Note that the 20-year period only applies to illegal entrants, individuals who entered the UK on a Visitor visa or those who have overstayed.)    

Private wealth considerations

The key reductions under the “contribution pillar” that are relevant to HNW and UHNW individuals are as follows:

There are also two further points to note:

• “these income-related thresholds would not track future changes to the tax system”; and
• the applicant must have “no outstanding litigation, NHS, tax or other government debt”.

Interaction with the 4-year FIG regime 

See The UK’s proposals for non-doms and their structures. 

Those who qualify for the favourable 4-year FIG regime on their foreign income and gains during their first four years of UK tax residence should make sure that they have taxable UK income of “£125,140 for 3 years immediately prior to applying for settlement”. 

Ten-year Long-Term Residence for UK inheritance tax

As set out in our article (Residence, Long-Term Residence and Domicile: what do they mean? - Burges Salmon), a person will generally be Long-Term Resident ("LTR") in a given tax year if they were UK tax resident in at least ten of the 20 preceding tax years.  They will retain the LTR status for as long as they are UK tax resident and for a certain number of tax years after they cease to be UK resident (known as the “tail” period).  

Those who are LTRs (including those within the “tail”) will be subject to UK inheritance tax ("IHT") on their worldwide assets.

Therefore, those who will qualify for “earned settlement” under the ten-year baseline period are likely to become subject to UK IHT on their worldwide estate.  However, UK tax residence and immigration residence are not the same, and as such those who are likely to be affected by the increased baseline for settlement should seek further advice. 

Other observations

• It remains to be seen whether the Home Office will have capacity to process an anticipated surge of applications for ILR and British citizenship.
• Whilst the Government seems to be encouraging individuals to apply for British citizenship because only dependents of British citizens (and not ILR holders) are exempt from the Consultation, dual nationality is not permitted in certain countries.
• Those on maternity/paternity leave or long-term illness/disability are not excluded from the Consultation.  In contrast, for example, the length of and income from employment during maternity, paternity, adoption or sick leave are expressly permitted under Appendix FM under the Immigration Rules.

How can we help?

Burges Salmon's specialists have substantial experience in immigration, tax, trusts, and estate planning for international clients.  If you wish to discuss any of the matters raised in this article, please do get in touch with Suzanna Harvey, Myra Leung, Megan Thomas or your usual contact within the team.

In October 2025, the Home Office laid new Immigration Rules before Parliament, introducing pro-talent reforms to the High Potential Individual, Innovator Founder, and Global Talent visas.218 Taking effect from November 2025, these changes streamline access to top-tier talent in support of the UK’s modern Industrial Strategy.