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Court of Appeal decision gives Pyrrhic victory to Investors who used the "Maxwell Scheme" - a cautionary tale

Applicants who submitted their Tier 1 (Investor) visa applications before 6 November 2014 had to show that they had at least £1m under their control to invest in the UK. The £1m could have been loaned to them by a UK regulated financial institution provided the applicant owned personal assets of at least £2m. The £1m must then be invested in qualifying investments which included an investment in a UK registered company.

The case of (JW & Ors) v Secretary of State for the Home Department (Tier 1 Investor; control; investments) [2019] UKUT 393 (IAC) centred around a scheme which involved Maxwell Asset Management Limited (Maxwell), a UK regulated financial institution. Maxwell loaned applicants £1m and the applicants were required to invest the funds in Eclectic Capital Limited (Eclectic), a UK registered company. The loaned £1m passed directly from Maxwell to Eclectic. Maxwell and Eclectic were linked in that the owner of Maxwell and the owner of Eclectic were spouses.

Over 100 applicants took part in the scheme to obtain Tier 1 (Investor) visas and were required to pay a fee of £200,000 to Maxwell Holding Limited, the offshore holding company in which Maxwell was a wholly owned subsidiary. When applicants submitted their Tier 1 (Investor) visa extension applications, the Home Office refused the applications on the basis that the £1m loaned to the applicants was not under their control because they were unable to invest the money anywhere other than Eclectic. This decision was confirmed in the above case heard in the Upper Tribunal. Consequently, hundreds of applicants under this scheme had their visa applications refused.

On 20 April 2021, the Court of Appeal in Wang & Anor, R (On the Application Of) v Secretary of State for the Home Department [2021] EWCA Civ 679 (11 May 2021) overturned the Upper Tribunal decision, ruling that the scheme was legal after all. The court found that in the immigration rules, the definition of “control” had to do with the “personal availability” of the funds to the applicants and this requirement was met if the applicants had sole and unrestricted power to direct that the loan was used for a qualifying investment. Consequently, the strict terms and conditions of the loan did not mean that the funds were not personally available to the applicants. Lord Justice Popplewell stated that the scheme did not fulfil the policy purpose behind the Tier 1 (Investor) category in that the applicants did not make a substantial investment in the UK. He further criticised the poor drafting of the immigration rules which permitted applicants to take advantage of this scheme in that it did not clearly draft the immigration rules to its intended objective.

This decision may pave the way for other applicants who have participated in similar schemes which also do not meet the Home Office’s intended objectives for the Tier 1 (Investor) category but does meet the strict interpretation of the UK immigration rules. In these scenarios, the Home Office may be bound to approve their applications.

Following this decision, we would expect the Home Office to redraft the immigration rules to tighten the requirements of the Investor category to put any matters of interpretation beyond dispute.

Even in light of the Court of Appeal decision, we strongly advise Investor applicants not to participate in any schemes which may be called into question. The applicants under this scheme had their applications refused and their lives uprooted when they were required to leave the UK. Consequently, for certainty and peace of mind, Investor applicants should avoid any schemes which appear designed to circumvent the intended objectives of the Investor category and seek advice from a UK immigration adviser who has extensive experience in this field.


uk immigration, investor visa, immigration