Budget News – reversal of changes to High Net Worth Individual and Self-certified Sophisticated Investor criteria

Nick Williams

Nick Williams

Partner

As highlighted in our recent news release, with effect from 31 January 2024, the government updated the exemptions which allow shares and other financial instruments to be marketed to High Net Worth Individuals and Self-certified Sophisticated Investors without the regulatory protections provided by the financial promotion regime.
 
For High Net Worth Individuals, the financial thresholds to be eligible for the individual exemption were changed to: an income of at least £170,000 in the previous financial year (raised from £100,000), or certain net assets of at least £430,000 throughout the previous financial year (raised from £250,000).
 
For Self-certified Sophisticated Investors: the exemption was amended by removing the criterion of having made more than one investment in an unlisted company in the previous two years and the annual company turnover required to satisfy the "company director" criterion being increased to £1.6 million (from £1 million).
 
In today’s Budget statement, the government indicated that it will legislate to reinstate the previous eligibility criteria to qualify as a high net worth or sophisticated investor, and will also carry out further work to review the scope of the exemptions.
 
Investors and financial advisers should accordingly prepare for the legislation being implemented.
 
If you require legal advice or assistance in relation to the issues described, please get in touch with your usual contact at DMH Stallard LLP or contact Nick Williams by email or call on 0207 8221523.
 


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