Earnings using dividends from a dissolved company

[mta37]

I am applying for indefinite leave to remain as a Tier 1 General migrant. I have an appointment at the Liverpool PEO at the end of June.

I am planning to claim my earnings from a single large dividend payment made in early May 2011 (i.e. 14 months prior to appointment date). I was the sole director of the limited company paying the dividends. I started full-time study in September 2011 so I left the company at the end of August 2011, remaining monies were transferred out a few months later, and the company was finally dissolved in May 2012. There are other company earnings (and a small salary) I could add if necessary, but the dividend payment is enough to give me the required points and I thought it would be simpler that way.

Reading through the Immigration Directorate Instructions Chapter 6A, I can't see anything that specifically says the company must still be active, however there are a few quotes that use present tense that make me a bit nervous, eg:
"dividends paid by a company in which the applicant is active in the day-to-day management". In this case I was, but am no longer, actively managing.

There is also this sentence in the Tier 1 General guidance:
"If we make checks on an applicant who is self-employed we will try to establish the business presence, for example by checking business and/or tax registration." I'm not sure here whether they are referring to the UKBA definition of self-employed (which seems to include sole directors) or the HMRC definition, and if it's the UKBA definition whether the business still needs to be registered.

I was wondering whether anyone knows of any acceptances or rejections where the sole earnings were dividends from a dissolved company?

Any advice much appreciated.

[mta37]

I spoke to someone in the UKBA call centre. She said that the Tier 1 visa is a work visa and that I can't be studying. I said that I ensured I had the required 12 month earnings and therefore should qualify for a Tier 1 ILR before making the decision to take time out to study. She basically said that I could apply but it was risky whether I would be granted ILR. When I asked where it says that I must be economically active she said paragraph 245CD and paragraph 6A. However she couldn't point me to where exactly it said that, and I can't see anything concrete that states what I'm doing is outside the rules.

For example 6A states:
An applicant does not have to be in continuous or full-time employment during the 12 months being assessed.
An applicant may claim for a period of earnings of less than 12 months if they have earned sufficient funds to claim the necessary points.

245CD states:
Where the application is being made under the terms of the HSMP ILR Judicial Review Policy Document, the applicant must be economically active in the UK, in employment or self-employment or both.

However I'm not applying under those terms.

I'm now wondering whether I should either reopen my dissolved company or open a new company to show that I am economically active (which I will be in a month anyway).

If anyone can offer any insight to my situation, or can recommend an immigration lawyer or similar who could help I would be very grateful.

[goldfish]

I don't think there would be an issue in claiming earnings for a company that you *were* active in managing at the time of your earnings even if it is dissolved. The equivalent for a permanent employee would be salary from a company that subsequently became insolvent and I don't think UKBA would say these earnings are invalid.

However, whether you should be able to demonstrate active economic activity at the time of your application is a separate question. Are you in scope of the JR or not? This would be relevant to advise further.

Also, you may want to consider whether you want to give details of your study. If you are not required to give these details (which you aren't), you may just complicate your case by giving unecessary information.

My view is that Tier 1 / HSMP gives you the *right* to work, but this isn't an obligation that you *must* work (provided of course that you can demonstrate any necessary earnings for your extension). If you were not allowed to study in Tier 1 / HSMP then (1) it would be specified as a condition on the visa (there are conditions on other visas e.g. Youth Mobility) and (2) UKBA would ask whether you have been studying when you apply for extension in the same way as they ask whether you have used public funds. They don't do either. This suggests to me that while the Tier 1 / HSMP is intended as a work visa, there isn't any restriction on you using it for study. But I am not UKBA

My advice would be to resolve the question about whether you need some active earnings at the time of your application, and avoid discussing your study unless you are asked (in which case you should of course answer honestly).

[mta37]

goldfish,

Thanks a lot, that is helpful. I'm not in scope of the HSMP ILR Judicial Review terms so that shouldn't be relevant.

I have spoken to an immigration advisor today and a different UKBA call centre agent and they both said similar things to what you said, ie that earnings from a dissolved company should be ok and that I have the right not to work under the Tier 1 visa. The immigation advisor also suggested that I should avoid discussing the study.

The call centre agent said that it is up to the PEO agent who sees me on the day to determine whether I can support myself going forward, and that I should take the previous 5 years worth of P60s to prove to them that I have for the most part been working, along with bank statements to show I can continue to support myself for some time.

My plan is to give the minimal documentation they require (eg dividend vouchers + bank statements), but to carry all other proof with me in case they ask for it including:
- P60 for 5 years
- 5 years of personal bank statements
- All business bank statements
- Letter from accountant confirming I was sole director and earnt dividends and salary as claimed
- Invoices
- Company formation and dissolution letters
- HMRC VAT registration letter
- Annual statements and proof of corportation tax paid

I will not mention that the company is currently dissolved until they ask.
I will also not mention that I'm currently studying and will instead give a general answer unless they ask specifically what I'm currently doing.

[aliq09]

I am applying for indefinite leave to remain as a Tier 1 General migrant. I have an appointment at the Liverpool PEO at the end of June.

I am planning to claim my earnings from a single large dividend payment made in early May 2011 (i.e. 14 months prior to appointment date). I was the sole director of the limited company paying the dividends. I started full-time study in September 2011 so I left the company at the end of August 2011, remaining monies were transferred out a few months later, and the company was finally dissolved in May 2012. There are other company earnings (and a small salary) I could add if necessary, but the dividend payment is enough to give me the required points and I thought it would be simpler that way.

Reading through the Immigration Directorate Instructions Chapter 6A, I can't see anything that specifically says the company must still be active, however there are a few quotes that use present tense that make me a bit nervous, eg:
"dividends paid by a company in which the applicant is active in the day-to-day management". In this case I was, but am no longer, actively managing.

There is also this sentence in the Tier 1 General guidance:
"If we make checks on an applicant who is self-employed we will try to establish the business presence, for example by checking business and/or tax registration." I'm not sure here whether they are referring to the UKBA definition of self-employed (which seems to include sole directors) or the HMRC definition, and if it's the UKBA definition whether the business still needs to be registered.

I was wondering whether anyone knows of any acceptances or rejections where the sole earnings were dividends from a dissolved company?

Any advice much appreciated.

Hi ,

To my best knowledge it will be the net dividend which will be considered . If the company is no more in working state than what about the bank statements ? .
In my opinion , prepare yourself for a very good reasons infront of officer that why company was closed and now your working in which capacity. For instance you can say i am permenant employed by ABC company and here is my contracts . In my opinion , they will check your closed company if you are showing them some earning from it so you better have a really good and supporting answer for them

Best wishes and good luck mate!

[mta37]

Thanks aliq09. The company is dissolved but I have copies of all the bank statements, along with a letter from the accountant confirming earnings etc. Hopefully they accept the earnings without too many questions, and if they do ask why the company was closed hopefully they accept a general answer without further questioning.

Even if they do hear the full story I don't think there is any legal reason why I shouldn't receive a visa - I'm not aware of any restriction on studying on a Tier 1 as long as I meet the earnings requirements, but then again it seems like a certain amount is left up to the judgement of the border agents so maybe I will get unlucky on the day.

[goldfish]

You might also want to have an explanation of your overall plan in case you need it, e.g. working in particular industry, realised business could be improved by additional qualification, commenced study, closed company for reason xyz, will start new business on abc date, ...

[mta37]

Good idea, I'll make sure I do that. Thanks.

[Smatholi]

Hi mta37, So have you applied for extension. Do let us know the outcome...Cheers

[mta37]

Yes I got it yesterday. In the end it was pretty simple - I handed over all my documents to the caseworker and he came back later to tell me I had the visa. So no issues with the dividends from dissolved company and no questions re what I'm currently doing.

Thanks again goldfish for the help.