How does Brexit affect British expats?
Since Article 50 has been triggered, one of the main points of conversation has been how expats and people who own property and/or live in EU countries might be affected by Brexit. Expats were able to vote in the EU Referendum (as long as they hadn’t lived abroad for more than 15 years).
Brexit is set to have more of an impact on expats than many people realise. Residency rules might be changing, but the financial fall-out is already being felt. International workers need to act now to make sure their finances are properly protected in a post-Brexit world.
There is much uncertainty surrounding the eventual outcome of Brexit but whatever happens, investments in Britain – whether savings, pensions or property – will all be affected by the changes set to come into effect by 2019.
Here’s everything we know so far about the position for expats.
In the EU how many British expats are there?
Just over 4.5 million Britons live abroad, with approximately 1.3 million of them in Europe, according to the United Nations.
Where do they live in the EU?
The top destinations for British expats,according to the United Nations, in the EU are:
- Spain – 319,000
- Ireland – 249,000
- France – 171,000
- Germany – 99,900
- Italy – 66,000
- Netherlands – 47,300
- Cyprus – 38,800
- Poland – 35,800
- Other – 148,000
Are expats worried about the impact of Brexit?
In a paper outlining the risks of Brexit prior to the June 2016 vote, the Government said: “Many UK citizens would want any negotiations to secure their continued right to work, reside and own property in other EU states, and to access public services such as medical treatment in those states.
“UK citizens resident abroad, among them those who have retired to Spain, would not be able to assume that these rights will be guaranteed.”
Thanks to the EEU’s right of free movement British expatriates are able to reside in other European countries, which means EU members currently cannot ban or expel citizens of other EU states.
Dominic Grieve QC, Former attorney general, has argued that if Britain doesn’t maintain some form of free movement after Brexit, it may see British citizens living in EU countries “becoming illegal immigrants overnight.”
There have also been fears that member states angered by Brexit could try to put pressure on British expats in revenge – For example, Spain could ask British retirees to pay for their own healthcare, or move to curb access to healthcare services outright.
Although this is possible, it is unlikely – remember there are as many as three million EU nationals living in Britain and it would open the door to retaliatory measures from the UK.
The uncertainty surrounding Brexit is causing the current financial market volatility and it is likely to consider for some years and this means the performance of investments and pension may be affected.
At the end of August this year the weakening pound hit an eight-year low against the Euro and if Britain decides to press ahead with a hard Brexit it is likely to slip further.
If you are a deposit investor your sterling GBP are just sitting there going down in Euro terms and with the low interest rates we are experiencing, you are devaluing. This means that potentially some expats may have already lost considerably on UK assets in currency terms over the last 12 months.
Could EU Members deport expats?
NO – the Vienna Convention of 1969, which says that the termination of a treaty “does not affect any right, obligation or legal situation of the parties created through the execution of the treaty prior to its termination.”
Basically, Brits who have already exercised their right to live in EU states can expect to keep that right after Brexit.
One important point though: this only applies to people who have started expat life in the EU before Brexit. Post-Brexit, Brits’ ability to live and work in EU nations will depend on new agreements the UK negotiates with those nations.
It’s not all good news…
Depending on how resentful they feel towards Britain, the remaining EU nations could consider a variety of measures, like making foreign homeowners pay more in tax.
So what should expats be doing to reduce potential risk?
Now is the time to act! You have got to hedge your bets and take advantage of opportunities which may no longer be available once the outcome of Brexit has been determined. Expats should start planning and considering their options now rather than waiting until it’s too late to do anything. To get all of your financial affairs in order contact us now!