1. ABritishExpatsGuidetoBrexit

3. Contents
4 How will the Brexit affect British expats?
6 Currency & Taxes
7 Pensions & QROPS
8 Property
10 Healthcare
11 Public Services
12 Future Relationship to the EU
14 Brexit Conclusion
3© 2016 deVere Group. All rights reserved.

4. HowwilltheBrexit
affectBritishexpats?
Now Britain have voted out of the 28, soon to be
27, member bloc, there are a lot of questions being
raised around the subject of, what is this actually
going to mean for me? In truth, neither side really
thought it was going to happen, that much is
obvious from the reactions seen in the early hours
on Friday 24th June and the subsequent political
fallout.
The next step is for Britain to inform the EU it
wants to exit using Article 50, which will be the
first time in the history of the union. However, it
is uncertain when this will happen. Theresa May,
David Cameron’s successor, has already stated she
will not decide until later whether to initiate article
50 or not.
Since the result of the EU Referendum, leading the
conservative party has been compared to picking
up a poisoned chalice, and that the new PM is
putting their whole career at risk. Do they break
ranks and deny the public the outcome they voted
for, or do they press on, possibly inducing the
4
break-up of the UK? Both are political suicide; the
coming months will be interesting to keep an eye
on as will the developments as to what will happen
to British expats living in Europe.
Currently things are very vague and nothing is
clear, given the amount of untruths banded around
by both parties during campaigning, actually
being able to predict what will happen should the
government press ahead and use article 50, is very
difficult indeed.
With times being so uncertain there has never been
such a vital moment to enlist the help of a financial
advisor to ensure your assets are safe no matter
what happens in the months, and years, following
the EU Referendum result by contacting deVere
Group today.
In this guide the deVere Group analyses how the
EU Referendum result might affect British expats in
terms of property, pensions, healthcare and public
services.

5. 5
In 1973, Britain joined the EU, giving its citizens
the opportunity to take advantage of“freedom of
movement”across other EU member states. In the
years that followed, Brits rejoiced in building new
lives abroad, either to work or retire. However, now
Britain have voted out of the European Union, what
does it mean for British expats, who are already
living abroad or looking to move in the next few
years?
In short, the future for expats is not yet clear,
as many aspects have not yet been discussed
or debated by the British parliament with the
European Leaders. However, it is a common
assumption that the Brexit vote will mean some
loss of their“freedom of movement”within the
European Union as well as their access to pension
funds, healthcare and ability to buy real estate.
This comes part and parcel with the single market
arrangement, you can’t just have one part, you
need freedom of movement with the single market.
A British Expats Guide to Brexit
© 2016 deVere Group. All rights reserved.

6. 6
Currency
With the pound crashing to its lowest levels in
31 years, dropping below $1.35 for the first time
since 1985 and still falling, the referendum result is
making its presence felt around the globe. The FTSE
100 Index felt the result hard too, losing more than
£120bn off the value of its constituent companies
in the opening minutes of trading, although
making the losses back. The FTSE 250 followed suit
and dropped a staggering 11.4% and this is the
more worrying market to consider.
The Pound has dropped and is likely longer
term to continue to fall in value as the issues
around Brexit unravel. Certainly if an individual
has UK paying assets, be that bank accounts
or UK pensions they may wish to consider
transferring these to other products and then
diversifying investment.
Taxes
Speculation suggests that the tax situation is likely
to remain the same as there are already bilateral tax
agreements in place between the UK and many EU
countries which should not change even if Brexit
goes ahead.
Furthermore, local property tax is commonly
structured on how long the owner stays in the
property rather than if they are from that member
state or not; residency is deciding factor on your
tax bracket, not citizenship. The only concern is
whether UK expats will have to pay more taxes
upon buying or selling property.

7. 7deVere Group. All rights reserved 2016 ©
Pensions
For British nationals who have decided to retire
abroad in popular EU countries such as Spain,
Portugal and Greece, they could face their State
Pension being frozen now Britain have left the
EU. Previous reciprocal agreements between EU
countries guaranteed that the annual State Pension
increase would also apply to Britons living in the
respective countries could be scrapped along with
reciprocal credits for years worked and credited
for the state pension. However, in the majority of
the new EU members in Europe, there are no such
agreements in place.
Furthermore, many are branding this as bureaucratic
garbage. For example, British pensioners who are
retiring to the US will get the full state pension
increase each year. Whilst those living over the
border in Canada will not. Currently, around 560,000
British pensioners living abroad would have their
pension frozen, whilst a slightly higher number
would still enjoy the yearly increase, purely because
they are located in a different country.
Employer provided and other private pension plans
may also have conditions and restrictions which
could negatively affect an expat given the result of
the out vote in the EU Referendum.
It is also worth reviewing any UK pensions that have
not commenced yet where an individual intends to
retire abroad. UK pensions generally make payment
in sterling and are invested in sterling assets which
are likely over the long term to be negative. With
scheme solvency margins also like to continue
to decline as gilt yields and interest rates decline
further, added to the problems of sterling we would
suggest clients consider if a UK pension is the ideal
solution for their retirement. They may wish to
consider a transfer to a recognised overseas scheme.
QROPS
Although originally designed as a response to
EU legislation, the transfer of UK pensions to
recognised overseas schemes is now enshrined
in UK legislation and in certain EU countries
legislation, like Malta.
The option of transferring a UK pension abroad
for an expat is likely to continue. The UK has two
years at least to attempt to negotiate its way out
of the EU under Article 50, so there is at least two
years of certainty on QROPS. However, even then,
once the UK has formally left the EU, it is unlikely
that pensions will be high on the list of priorities to
change, if at all.
With the certainty of pensions for the next 2 years
at least, this is the perfect time to take advantage of
using overseas schemes rather than a UK pension
for some of the reasons mentioned above.
A British Expats Guide to Brexit

8. 88

9. 9
which could jeopardise housing demand, especially
from British buyers who form a crucial part of many
overseas property markets.
For those expats who have been living in an EU
country for over five years, it’s possible you will have
to apply for long-term resident status under EU
law. However, your status would be more limited
than your current one as an EU citizen, and there
may be‘integration rules’for long-term residency.
For instance, being able to speak your host nation’s
language.
The fear for many expats, who have been living
permanently within the EU but who did not qualify
for long-term resident status, is that they might
have to return to the UK – this being the worst case
scenario. We think this is quite unlikely to happen
however.
Currently, interest rates are at record lows in
many countries and the ability to borrow a high
percentage of the purchase price is easily available.
However, following the EU Referendum results,
Brits with a less attractive profile would possibly be
charged higher interest rates and would have to
put down a bigger deposit payment. With sterling
also crashing this will make overseas property more
expensive to UK residents but UK property should
become cheaper for those UK expats paying with
foreign currency.
There is also some concern for the UK property
market with the outlook on values being negative.
With Brexit, the pound crashing, new tax rules
on foreign domiciles biting and capital gains tax
applying to non UK residents who hold UK property
the outlook does not look rosy with an already over
inflated property market. Certainly UK commercial
property is causing concern with some of the
biggest UK property funds announcing a suspension
of these funds.
Property
With so many Britons owning property abroad,
either as a permanent residence or as a holiday
home, it is only natural for expats to have concerns.
However, depending on your situation, Brexit could
affect you in different ways.
As a holiday home owner, UK citizens may have to
apply for a visa in order to visit a country within the
EU. For many, the idea of this is already off-putting
as it’s likely to result in more paperwork to complete
with more intrusive questions about how long you
intend to stay, what your income is and what health
cover you have.
However, this should not affect the rights UK citizens
currently enjoy, allowing them to freely buy property
in EU countries, should they wish to in the future,
just like any other nationality. Again there could
be additional paperwork to complete and perhaps
higher taxes or fees in some cases. Although, in
reality it’s hard to imagine EU countries such as
Spain, who have not yet fully recovered from the
property market crash, from taking such action
© 2016 deVere Group. All rights reserved.
A British Expats Guide to Brexit

10. Healthcare
With over 1.2 million Britons living in another EU
country, and many travelling abroad for shorter
periods be it for work, retirement, or just tourism,
people travelling within the EU need to know that
they will be able to access medical care now the UK
is leaving the EU.
EU membership offers UK citizens an extensive
range of enforceable rights, including access to
healthcare. British holidaymakers currently have
the right to emergency healthcare with the use of
a European Health Insurance Card, which is free of
charge. Usually, if the treatment is necessary and
available on the NHS, and if the NHS agrees, then the
UK system will reimburse the cost of the treatment.
It is estimated that the NHS paid out over GBP528M
to EU countries for emergency care of UK citizens in
the EU last year.
Additionally, British citizens working and living in
any other EU country have access to local healthcare
on the same basis as citizens of that country,
which is at the host country’s expense. British old
age pensioners living in another EU country also
have the right to healthcare there, which the UK
ultimately pays for.
However, the Brexit result could remove the current
rights of a British citizen accessing healthcare
abroad, which they currently enjoy. It is possible that
the agreement might not provide cover for tourists,
or for patients who are keen to avoid long waiting
lists in the UK, and seek health services abroad as
an alternative. Nonetheless, the post-Brexit treaty
that the British government are going to have to
negotiate with the EU is likely to cover some of the
costs of healthcare of British citizens. Although,
the limitations, complexity and duration of such
arrangements remain highly uncertain until article
50 is triggered, possibly in October.
10

11. 11
PublicServices
Employment & Social Benefits
Currently, with the UK’s education system being
rated in the top 5 in the world, UK qualifications
are widely respected and accepted in European
countries and globally. However, when Britain has
fully left the EU, these qualifications could be less
admirable and would have to be subject to mutual
EU guidelines. There is the possibility that expats
may have to obtain additional local licenses or
certifications when applying for certain occupations.
Another area which could be severely affected are
social benefits. Similarly, to the UK, other European
countries are struggling to balance their budgets
and it would be unlikely for them to be overly
generous, especially to non-EU foreigners. However,
most British citizens do not move abroad simply
to claim benefits, so currently this is not seen as a
particularly pressing issue to many expats.
Education
Whilst the UK is a very popular destination for
EU students wanting to study abroad, there are
also tens of thousands of UK students studying in
continental Europe. One of the most appealing
aspects is the considerably lower tuition fees of most
universities. In the Netherlands, most courses cost
around £1,500 a year, and in Denmark and Sweden
it is completely free. For the less wealthy students
or for those who do not want the burdens of costly
student loans, this provides a great opportunity.
However, following the EU Referendum result,
English students will likely pay the same fees as
non-EU/EEA residents, which normally sits at around
€10,000. Moreover, students might also have to
obtain a visa from the country they want to study in,
causing the same difficulties that EU students will
face when applying to study in the UK in the post-EU
Britain which will soon become a reality after article
50 of the Lisbon treaty is triggered.
Brexit could also see the end of the Erasmus
programme, which allows EU students to study
abroad within the EU. Currently, UK students benefit
from this budget as well, with 14,651 English
participants in 2012/2013. Whilst EU citizens would
still be able to study in other EU cities such as Paris,
Berlin or Rome, UK students would struggle with the
increased difficulty of visas and hence would be at a
disadvantage, causing a decline in Brits wanting to
study abroad each year.
© 2016 deVere Group. All rights reserved.
A British Expats Guide to Brexit

12. FutureRelationshiptotheEU
Norway Model
Norway is part of the EEA with full access to the
single market. However, for this privilege, Norway
has to pay a fairly heft fee along with accepting the
majority of EU laws and total freedom of movement.
You can live in Norway visa free if you hold a
European Passport thanks to the Freedom of
Movement Act. Norway does have a say on certain
EU laws, these being fishing, agriculture, justice and
home affairs. However, Norway has no say on single
market rules.
The fee Norway pays is a per capita style fee, which
is exactly what the UK is paying at the moment per
capita!!
There are many different ways in which the UK could come out of the EU and form
deals. There are plenty of countries who are part of the EEA (European Economic
Area) and not a full member of the 28, soon to be 27, member bloc. The UK could
choose to adopt one of these nation’s models of EEA membership, but the UK could
also choose to go at it alone.
The UK could choose any of the following:
12

13. 13
Switzerland Model
Switzerland are members of the EFTA (European
Free Trade Association) as opposed to the EEA.
This gives Switzerland access to a wide variety of
EU markets via a series of bilateral agreements, in
total 120. However, this does not cover every sector,
Switzerland have no trade agreement with the EU
when it comes to banking for example.
Switzerland does make a contribution, but it is not
as large as Norway’s. Switzerland also does not need
to abide by any EU laws, however the Freedom of
Movement applies, although Switzerland is currently
in dispute with the EU following the migrant crisis.
Turkey Model
Turkey has a customs union with the EU which
includes no tariffs or quotas on industrial goods but
is not a member of the EU or EEA.
Canada Model
Canada’s model is yet to come into force, but it
gives Canada preferential access to the EU without
obligations such as contributions and freedom of
movement. However, Canada does not receive any
services from the European Union.
© 2016 deVere Group. All rights reserved.

14. 14

15. 15© 2016 deVere Group. All rights reserved.
BrexitConclusion
There has been many reactions following the
result on Brexit, from demonstrations by the young
wanting to remain in, suggestions of a complete
collapse of the UK economy, media reports of other
EU countries want to stop trading with the UK,
force British expats out and impose various other
restrictions as“revenge”, Scotland wanting to remain
in the EU and force a second referendum over
leaving the UK, Political Leaders resigning, the out
campaign claiming the UK is free of EU bureaucracy
and regulations to the debate of what will happen
now.
The reality of the Brexit is uncertainty, and this
will continue to prevail for months, if not longer.
Although, now the new Prime Minister is in place,
she can start talking to the EU about how the UK will
exit. But the EU is only a part of the equation with
trade with the UK and it is for the UK Government
to take the reins quickly and start negotiating trade
deals with the rest of its trading partners as quickly
as possible.
With regard to expats, arguably, British expats have
a positive impact in most countries in terms of
taxes paid and demand generated, together with
a number of other aspects. In the interest of their
own economy and society, most EU countries will
want to continue the healthy and active relationship
they have with the UK, as much as we want a strong
relationship with them. Continuing a good rapport
with our current allies should limit any damage that
the Brexit will cause to British expats. There is also
an estimated 3million EU citizens’resident in the UK
and therefore we believe a compromise will occur
to allow all current citizens to remain in their chosen
country of residence.
It is also worth remembering that under a principle
enshrined by the Vienna Convention on the Law
of Treaties 1969 withdrawal from a treaty releases
the parties from any future obligations to each
other but does not affect the rights or obligations
acquired before withdrawal. In addition, any actions
to remove UK citizens currently in EU member
states would directly contravene Article 19 of the
EU Charter of Fundamental Rights and Article four
of the Convention of Human Rights under which
collective expulsions are prohibited.
Whilst it’s important understand all of the
ramifications that the out vote has caused, there is
no reason for panic, especially until a decision has
been made, as after all, Cameron’s successor may
decide to ignore the public and Britain could well
remain part of the EU for many years to come.
It is important to consider and start planning now
and certainly reviewing one’s financial plan and
assets is very important and we recommend that
you speak to an experienced deVere Financial
Adviser.
A British Expats Guide to Brexit

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