UK Tier 2 Visa General. Shares in company sponsoring me

[kedaiapps]

Hi,

I am on a tier 2 visa. My boss has said that if i have a new biz venture i can propose it. I have an phone app idea that may make quite a fair sum if successful. I understand that i can only take a maximum of 10% shares in the company as a non-director.

Additional information: this venture will be not related to our industry but my job scope/roll will be the same as my tier 2 cos

Question

1) Can i be issued 45% of the companies profit as a commission. Profit will be purely base on app sales

2) I will get my ILR in 3 years, can i make a proxy agreement saying that they will release the value of the shares in at the end of the financial year of 2012/13.. to me when i get my ILR? will that breach any rules?

3) Is there a visa category i can transfer into, in order for me to be a director?

I want to gain a fair amount of the sales proceeds from this, taking 10% shares is not an option i would like to go for.

Many thanks for your help

[John]

There are not just visa-related issues there, but also tax-related issues. You really should speak to an accountant or tax consultant about those technical issues.

[manci]

re your point 3) - quote from the Tier 2 Policy Guidance:

189. You must also make a change of employment application if you are remaining with the same employer but:
• there is a change to your core duties which means you change jobs to a different Standard Occupational Classification (SOC) code;

and concerning share ownership in the company:

You must not own more than 10% of your sponsor’s shares, if the sponsor is a limited company, unless you are applying under the Intra Company Transfer category.

and from the Tier 2 sponsor guidance:

520. In all of the circumstances described in this section which result in a migrant having to make a change of employment application, you must conduct a resident labour market test (where this guidance requires it) before you assign a new CoS to that migrant. For example, if a migrant you are already sponsoring under Tier 2 (General) wants to continue working for you, but in a different job which is in a different SOC code to the one you quoted on their original CoS, you cannot simply give them the job and assign a new CoS to them straight away unless there is an exemption from the resident labour market.

If I understand it correctly you will remain employed by the same company (your current sponsor) but will be doing two different jobs: a) your current job and b) a directorship role. You can only have one CoS though and your employer has to decide whether or not a new CoS (and the RLMT) will be required. The question of supplementary employment may also be explored. This is not a straightforward situation and your employer will probably need to obtain professional advice.

[kedaiapps]

Thanks for your advice.

Just to add on. Lets say my role remains as developer in this new venture

the product is developed under the same company.

Would this be alright? So as an incentive for developing this app, i get 45% of the sales as a commission.

I'm not worried about taxes, i will pay whatever is needed. So it will be treated as an income tax? I mean as it is i am getting a tiny percentage of the companies sales which is just treated as normal income tax

[manci]

It is up to your sponsor to determine its obligations under the rules for sponsors. The guidance is in the link below but as I said this is not a straightforward situation and they may need professional advice.
http://www.ukba.homeoffice.gov.uk/sitec ... sguidance/
I cannot comment on tax issues.

[John]

As regards taxes you asked " I will get my ILR in 3 years, can i make a proxy agreement saying that they will release the value of the shares in at the end of the financial year of 2012/13.. to me when i get my ILR?", and there are certainly tax implications of such an arrangement.

[kedaiapps]

Thanks Jon, Manci. The info was helpful