In the wake of the UK Government’s recently published White Paper, MPs have again been warned that it may become illegal to make payments from UK private pensions to expat Britons resident in the EU if the government fails to secure a specific Brexit deal.
A no-deal Brexit could lead to UK firms losing access to the EU ‘passporting’ regime – meaning that UK-based insurers and providers could be rendered unable to make payments into the EU post-Brexit if no alternative arrangement is made.
This warning was made by the Association of British Insurers when giving evidence to the Exiting the EU Committee’s inquiry into process made in the negotiations.
Director general Huw Evans told the committee last week that such a risk was indeed plausible in the event that no deal is reached by 29 March next year.
The comments reiterate concerns expressed by the Treasury Committee chairwoman Nicky Morgan, who last year wrote to chancellor Philip Hammond noting that a no-deal Brexit could lead to affected businesses having to choose whether to “break contracts or break the law”.
It is suggested that the issue would particularly affect those with policies provided by insurers from occupational scheme buyouts, as well as members of cross-border schemes in Northern Ireland and the Republic of Ireland.
The possibility is even likely under the government’s current agreed Brexit position. In its white paper, the government repeatedly stressed that it would be impossible to remain in the EU’s passporting regime post-Brexit as this requires membership of the Single Market, and that any future arrangement cannot replicate the EU’s passporting regime.
The Financial Conduct Authority (FCA) also said last week that it would put in place a “temporary permissions regime” to allow EU-based companies to continue to access the UK market.
Depending on the outcome of a consultation, due to be launched in autumn, and the negotiations, this would apply to the end of the transitional period in December 2020.
Speak to us if this concerns you
If you have private UK pension funds remaining in the UK, the importance of speaking to an expert on this cannot be stressed strongly enough. At Forth Capital we have vast experience in dealing with Expats’ retirement planning and pension investments, and our team of advisers will be happy to discuss your own situation with you in a free consultation to establish whether any action may be necessary and to isolate your options.