Brexit, it some form or other, appears to be a certainty.
With Prime Minister Theresa May stating that there will be no second referendum to approve the final conditions, the direction of travel is set, and, at present, the UK is set to leave the European Union on March 29th next year.
So far though, as we all know, a lot of the details are not settled.
The British government has now at least published some guidance for British expats living and working in EU countries.
Some details have already been agreed to, and others are still pending but one of things we know already is that there is a transition period from March 30, 2019, to Dec. 31, 2020.
British Expats will have certain rights to live and work in the EU guaranteed but may be required to apply for residency documents depending on their country of residence.
The possibility that there could be no deal in place, i.e. the UK and the EU fail to agree on conditions for key areas.
One key point that would affect expats is that they may lose access to accounts held in Britain, as the UK would not have access to EU money clearing structures.
Insurance policies would also be affected.
This could also impact on people who receive salaries or pensions from UK-based firms and institutions.
With respect to this point, the guidance reads:
“In the absence of action from the EU, EEA-based customers of UK firms currently passporting into the EEA, including UK citizens living in the EEA, may lose the ability to access existing lending and deposit services, and insurance contracts (such as a life insurance contracts and annuities) due to UK firms losing their rights to passport into the EEA, affecting the ability of their EEA customers to continue accessing their services. This could impact these firms’ ability to continue to service their existing products,”
While the UK government states its intention to protect its citizens abroad, it does admit that it has limitations in what it can do.
The published guidance states:
“The UK authorities are not able through unilateral action to fully address risks to the EEA customers of UK firms currently providing services into the EEA using the financial services passport.”
The government appears to be shifting some of the responsibilities to the lending firms themselves.
There is an attempt at a rather technical explanation of what a no deal Brexit would mean for businesses and individuals regarding banking and insurance on this page.
“Many UK financial services firms who currently passport into the EEA are taking steps to ensure that they could continue to operate after exit, for example by establishing a new EU-authorised subsidiary. This would allow the UK firm to offer new services after exit through its EEA subsidiary, and in some cases existing contracts could be transferred to the new entity.”
Away from financial services, the free movement of goods between the UK and the EU would stop without an agreement.
This means that EU made goods could become more expensive in the UK, and UK goods would be more expensive in the EU.
This is in part due to changes in value added tax, as the UK would be taxed as a non-EU country.
While the UK government says it is confident that these issues will all be worked out before the Brexit takes place, commentators observe that the slow progress in negotiations means that there is a high likelihood that no deal will be achieved in time.
British expats are one of the many groups that feel they have been largely ignored in the planning for a Brexit.
Complete details of the Government Guidance can be found here.
Whilst, like everyone else, we wait to see how the Brexit picture continues to unfold, we do invite you to speak to us about any concerns that you have in relation to your own financial planning and especially any pensions and assets remaining the UK. If you do still hold pension finds in the UK, now is the time to examine your options – before you lose those options altogether.
Reach out to us today to speak to one of our Expat Retirement Planning and Pension Transfer experts.