We will update individuals and owner managers on the implications of Brexit as announcements are made. We are looking as much to the advantages which are thrown up as the disadvantages. We are also looking at the private client and personal tax aspects which in many cases are more important than the commercial implications. Our extensive cross border practice with France means we are dealing with Brexit relocations in practice. Our in depth knowledge of French law and practice is a big advantage when dealing with relocations to France. Other advisers purport to deal with many EU jurisdictions – we just deal with relocation to France and know about it in depth. We have worked seamlessly with our legal and tax contacts in France for many years and have not hastily assembled a “Brexit” team after the referendum vote.
- EU Successions Regulation – There is unlikely to be any change here as the UK is already viewed as a non-EU state.
- French Tax Agents - On sales of French properties EU residents do not need to appoint a French “tax agent” to ensure the correct amount of French capital gains tax is paid. UK sellers may be forced to do this post Brexit which costs about 1% of the sale price in the tax agent’s fees.
- Some French tax provisions are more beneficial for EU residents (treated in the same way as French residents) than non EU residents. This is likely to work against the interests of UK residents post Brexit.
- The odds must be in favour of VAT costs falling substantially post Brexit for UK consumers.
- VAT is likely to change significantly and could be abolished in favour of a “Sales Tax”. It may be possible for UK consumers to pay less VAT if goods are sourced from outside the EU than from within it. The same may apply to UK based businesses. Consumers may decide to hold off making big purchases of items such as cars to see if VAT cost falls post Brexit. Importing cars from say the USA may become more tax attractive to consumers.
- Businesses with long term supply contracts may want termination or revue provisions inserted in case they can purchase elsewhere at lower or nil VAT cost or if their ability to reclaim the VAT they are charged by EU suppliers is restricted. This is also relevant to leases of commercial premises which from now on will typically run well past the likely Brexit date. VAT is usually charged on rent and service charges and options here should be considered.
- Consider provisions in contracts of employment for EU nationals that if they are unable to work in the UK (or face employment restrictions) there is no liability on their employer to make any payment to them. Also no presumption their employer will sponsor them for UK immigration purposes.
- Leaving the EU will probably mean more people in the “gig economy” are found to be self-employed. Employers may need to take this possibility of reclassifying workers later on, into account when currently drafting employment contracts.
- EU professional qualifications may no longer be automatically recognised. This will probably not affect EU people currently here but could have an impact on businesses recruiting say graduates to start a few years hence.
- If you have a case which you feel may need to go to the European Court it may be best starting it sooner rather than later. It is unlikely the European Court will continue to have jurisdiction over UK cases.
- Post Brexit, there may be issues with direct enforcement against defendants.