The 29th March 2019 is the day that Britain will leave the European Union (just three months away). While many of us are wondering what effect this will have on our daily lives, there is one section of society for whom the future is particularly worrying. According to the Office for National Statistics, there are almost 1.5 million British nationals living in Europe. For them, the concern is that they will lose many of their rights as EU citizens and that those wishing to live in Europe in the future will find it virtually impossible to do so, once the UK has finally left the EU. So, is the door closing for ex-pats?
What Happens after Brexit?
As of this time last year, the EU and Britain have stated that ex-pats from both the UK and Europe can, for the moment, continue to: “…live, work or study as they currently do under the same conditions as under Union Law.”
In short, this is taken to mean that should you already be an ex-pat living in Europe or achieve citizenship to your chosen EU state before March 29th, 2019, you should have the right to live there on a permanent basis. However, after that date a new process will come into effect, which may make things more difficult.
How will Living Abroad affect my Taxes?
Achieving the right to residency is only one hurdle to be jumped as the date for Brexit draws ever closer. There are aspects of living in the EU that might change, as further negotiations conclude and deals are done. A major worry for many ex-pats is whether their tax status may change. However, tax is a domestic issue, not handled by the EU itself. This means that how an EU member country chooses to tax its citizens is entirely dictated by that specific government. Despite this, there are some general points to consider:
• Ex-pats who wish to return to the UK as citizens may be subject to higher exit taxes than those repatriating or returning to EU countries.
• Britons with assets in an EU country could find they incur higher tax rates as these become deemed non-EU assets.
• You may find that any income you earn from assets in certain EU countries, such as holiday home rental, becomes taxable according to the gross amount.
Once Brexit has been implemented, the likelihood is that EU countries will levy the same visa rules against those wishing to repatriate from the UK as they do against anyone else from non-EU states. Unless you already have a second passport, the chances are that you will be required to have a visa and comply with any other entry conditions that that particular government deems necessary.
These conditions may vary from country to country, leaving no hard-and-fast rule of thumb to follow. If you are already a resident of an EU country, it’s doubtful that you’ll need to apply for a visa, although you might see your rights to automatic healthcare and other benefits changing and, in some cases, withdrawn.
Make Sure You’re Prepared
There’s no doubting that one of the implications of Britain’s withdrawal from the EU is that it will become harder for UK citizens to repatriate. However, while the process might be longer, it isn’t impossible.
Perhaps the bigger concern is how tax legislations will affect those wanting to begin a new life abroad. If you’re considering living in an EU country, the best advice is to start the ball rolling before March 29th, 2019. You may find that you need the services of a financial advisor or lawyer to ensure that your cash and assets work for you, even under the auspices of a foreign tax system.
In addition, cross-border taxation is something of a legal minefield and not something that should be tackled without professional legal advice.