Glossary

High Net Worth (HNW)

A High Net Worth (HNW) individual is defined in the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001. There is a standard definition that Business Angels will need to sign in order to make investments in small companies. For the purposes of the act, a HNW is defined as follows:

I am a certified high net worth individual because at least one of the following appliesâ€'
  • I had, during the financial year immediately preceding the date below, an annual income to the value of £100,000 or more;
  • I held, throughout the financial year immediately preceding the date below, net assets to the value of £250,000 or more. Net assets for these purposes do not include:
    • (i) the property which is my primary residence or any loan secured on that residence;
    • (ii) any rights of mine under a qualifying contract of insurance within the meaning of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; or
    • (iii) any benefits (in the form of pensions or otherwise) which are payable on the termination of my service or on my death or retirement and to which I am (or my dependants are), or may be, entitled.

See the definition of Sophisticated Investor.