This is a strange one… in the murky depths of the Chancellor’s Budget Statement released last week, there was the following amendment:
4.22 The government will also 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.
So then, after the new criteria for qualifying as HNW individual or sophisticated investor only came into force on 31st January this year, the government, after less than two months, is now proposing to reverse it and re-instate the previous criteria.
A few thoughts immediately spring to mind:
i. The reforms, which we looked at here back in November, were widely thought to be sensible in terms of reflecting the effect of inflation on thresholds and revised wording for declaration statements. So why the change of heart?
ii. The item quoted above is part of a section on SMEs – why this section when the reforms were largely about consumer protection?
iii. The changes came into force on 31 January – less than 6 weeks ago! Why the quick turn-around?
The new criteria will stay in force until such time as legislation is brought forward to enable the planned reversal, and in an election year we may never get that far, but what do you think is the Government’s intention in this quick reversal of criteria?
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