• wblogo
  • wblogo
  • wblogo

Fallout From Brexit - How HNW Immigrants, Non-Doms Are Affected

Tom Burroughes, Group Editor , London , 11 July 2016

articleimage

Issues around immigration, "golden visas" and cross-border status are thrown into the air by the Brexit vote, as this article explains.

So many issues have been thrown into the air because of the Brexit vote on 23 June. One area of concern is what happens to those high net worth individuals who have been seeking investor and entrepreneur visas to the UK (partly in order to gain entry to the European Union rather than just the UK); another is how those British citizens with EU-based assets, such as residential homes or operating businesses, might be affected. There are also concerns about whether EU citizens living in the UK, such as the hundreds of thousands of citizens from France, will be hit. 

Already, there are tales of how people are scrambling to apply for passports from other EU nations, or asking about residency rights. European countries such as France are reportedly trying to lure UK residents with tax breaks. There are reports that Irish passports are in hot demand for those able to qualify for them. Amid all this tumult, this publication has gleaned views and data from a number of private client advisors, such as lawyers, on what is happening. Those practitioners who want to add to the debate can email the editor at tom.burroughes@wealthbriefing.com 

Lawyers at Irwin Mitchell Private Wealth say there are steps EU residents of the UK can take. If such persons have resided in the UK for five years or more continuously, they should apply for a permanent residence card, which shows they have a right of permanent residence in the UK. "The right is derived from EU law but in our view it is unlikely that permanent resident status will be withdrawn from EU citizens who have acquired it. A permanent residence card will serve as evidence of status," said Alex Ruffel, partner at Irwin Mitchell Private Wealth. 

If the residency period is less than five years, an individual can consider applying for a registration certificate showing they are exercising EU rights to be in the UK. In the event that the UK enacts transitional rules that allow EU citizens who are resident at the time of Brexit to remain in the UK, such a certificate may be useful in showing UK residence.

Another option, if an EU citizen already has permanent residence, is to apply for naturalisation as a British citizen. Citizenship has advantages over permanent residence as it cannot be withdrawn, whereas permanent residence may cease if the holder ceases to have a home in the UK. 

People are concerned, as demonstrated by an upsurge in enquiries, said Andrew Tingley, immigration law partner at Kingsley Napley.

"We have certainly seen an increase in enquiries from long-term EU residents enquiring about UK citizenship and/or applying for a document confirming that they have acquired permanent residency under EU law. However, there does not appear to be any panic and the mood is very much one of ‘watch, wait and see’. All eyes will be on the next PM and what arrangements she or he will bring in for EU citizens already in the UK,” Tingley said.

Separately, Tingley’s colleague, Matthew Duncan, head of the private client practice at Kingsley Napley, does not expect panic. “International clients who are non-EU citizens still regard London as a safe haven and whilst a British passport may no longer be as attractive as it once was, the early indications are that they will still be drawn to investing in the UK despite Brexit. Given all the recent changes to the non-dom tax legislation, a number of clients are hoping the government will have enough on its plate for the next couple of years and stop targeting them as the focus will be elsewhere.” (He is referring to the current government’s tightening of the rules around non-domiciled tax status in the UK.)

"Clients are already telling us they are concerned about how to enforce cross-border family agreements. There are significant long-term uncertainties about the cross-border enforcement mechanisms in family law which have proliferated under EU law. They are linked to the principle of freedom of movement. Although that underlying concept is under attack politically, the current practical rules make everyday life considerably easier for separated clients across the EU," said William Healing, family law partner at Kingsley Napley.

Migration
Bruno L’ecuyer, chief executive of non-profit group Investment Migration Council, recently told this publication that a number of IMC members - ranging from practitioners, academics and policymakers - have received a spike in queries about alternative citizenship following the momentous referendum result. 

“In the longer term, the work of investor immigration firms working in the UK and Europe will be structured around agreements that are struck between the UK government and the EU in respect of the free movement of people – since this is one of the main pillars of the ‘internal market’ along with free movement of capital, goods, and services,” he said.

"It is still very early to comment on any changes in strategy, certainly a number of our members have received a spike in queries for information about alternative citizenship and this has been widely reported in the press, especially in the case of Ireland. In the longer term the work of investor immigration firms working in the UK and Europe will be structured around agreements that are stuck between the UK government and the EU in respect of the free movement of people - since this is one of the main pillars of the ‘internal market’ along with free movement of capital, goods, and services; here there is a very grey area, and until article 50 is triggered (probably by a new UK government), the EU has made it clear that there will be no informal or formal discussions," he said.

Pennington Manches, a law firm that specialises in areas such as immigration, said in a note: “It is important to stress that, until the UK formally leaves the EU, EU law will continue to apply within the UK and there will be no immediate change in the way that people move or trade. The same cannot however be said of public perception and the uncertainty felt by UK businesses and those who are planning to move to or do business in the UK.”

The type of immigration system the UK will end up with in relation to EU nationals will depend on which of the following two outcomes currently being debated is pursued, the law firm said. The outcomes are: the UK leaves the EU and the Single Market, which may mean that EU/EEA nationals will have to comply with domestic UK immigration laws (a points-based system); the UK leaves the EU but signs up to the EEA option - it stays in the Single Market and free movement for EU nationals could continue.

“EU/EEA passport holders, those holding EEA residence cards, and their family members already in the UK can continue to work and travel freely (free movement rights). Those employees who have been in the UK exercising treaty rights for at least five years may wish to apply for permanent residency to confirm their status. These applications can take up to six months to process,” the firm said.

“For those employees who do not currently qualify for permanent residency but are in the UK exercising treaty rights, it is expected that transitional arrangements will eventually be put in place to allow them to continue their employment. If the UK opts for the EEA model, then these employees may still be able to qualify for permanent residency,” it said.

Latest Comment and Analysis

Latest News