British National Overseas (BNO) status is a form of Commonwealth nationality created for Hong Kong residents. It enabled those living in Hong Kong to retain a type of British nationality after the territory was handed back to China in 1997.
BNO status was issued to those who were living in British dependent territories, such as Hong Kong, before 1997. The status is still valid today, allowing those who hold it to visit the UK for up to six months without the need for a visa. However, since the introduction of the new visa route for BNO passport holders in 2021, those with this document can now apply to live, study and work in the UK for a certain period of time. This provides holders with a specific route to stay long term in the UK and gain citizenship too.
What is a BNO passport and how did it come to exist?
The BNO passport is issued by the British government. It was first created in 1987 after the enactment of the Hong Kong Act two years earlier.
Who was eligible to apply for a BNO status?
Generally, those eligible for BNO status had to be a British dependent territories citizen through a connection with Hong Kong. Any applications had to be made before 1997, and it’s now no longer possible to apply for the status. However, other options are available for the dependants of BNO status holders.
What does a BNO passport let me do?
If you are based in Hong Kong and are a holder of a BNO passport you and your dependants are likely to be eligible to apply for a BNO visa to live and work in the UK. You’ll also be able to access consular assistance and protection from the UK diplomatic service.
Working and studying in the UK
As a BNO passport holder you’re allowed to work and study within the United Kingdom for up to five years. Once permission is granted you can take any type of employment within the UK and are able to study at any location.
What financial planning should those with BNO status take before moving?
As a Hong Kong resident with a BNO passport it can be extremely beneficial to start planning your financial move before moving physically to the UK. There are a number of reasons to do so, but in particular it can be extremely beneficial for UK tax planning purposes and to determine what tax liability you’ll face whilst working or studying.
Key actions to take
When planning your finances there are a number of key steps to take:
- Understand the date you will become UK resident as this could be before you physically arrive in the UK and may expose your worldwide income to UK tax. The UK has complex rules to determine your UK residence status and the date you will become UK tax resident, so working with a specialist tax adviser can be crucial.
- If you have been non-UK resident for more than five continuous years, you should aim to realise any capital gains before you become UK resident to avoid a future UK capital gains tax charge.
- You may need to restructure your investments so they are more tax-efficient for life in the UK.
- Don’t forget to consider whether your Wills need updating if you move overseas to the UK.
Do also bear in mind that the Hong Kong tax year begins on 1 April whereas the UK tax year starts on 6 April. If you do become UK resident in a tax year the default position is that you become UK resident (and potentially fully taxable on worldwide income and gains in the UK) from 6 April.
BNO and domicile status
There is a difference between domicile and residence when considering UK tax. Your UK residence status is determined each year under the complex Statutory Residence Test. Your domicile status is a much more adhesive position, usually determined at birth. It’s important to understand your domicile as it affects your exposure to UK tax – and in particular inheritance tax. A non-UK domicile only faces UK inheritance tax on their UK assets. However, if you’re UK domiciled your worldwide assets fall within the UK inheritance tax net.
Financial advice in Hong Kong
We have an office in Hong Kong with dedicated tax advisers and financial planners who can provide specialist UK tax advice for your move to the UK, help with formulating a tax-efficient wealth strategy for life in the UK and assist you with Wills and reducing your UK inheritance tax liability. If you would like to get in touch with our team, please contact us today.
Further information about BNO passports is available from www.gov.uk.
