The UK’s tax law is not fundamentally derived from EU law and our tax system is largely autonomous. Nonetheless like any aspect of UK law, our tax law is ultimately subject to compliance with our treaty obligations and EU law can be relevant, particularly in cross-border matters, both for multi-national businesses and international wealth holding structures. Separately the implications of Brexit for the VAT regime will need to be watched closely.
Just as importantly, Brexit will have a major impact on UK tax policy. Adapting to Brexit is likely to be the defining theme of the Chancellor’s Autumn Statement and next year’s Budget (this assumes there is no emergency budget before then). Significant tax changes are likely, whether this is simply to raise more tax or to assist businesses, attract inward investment and maintain stability in the property market. The Government may look at its changes to the non-domicile tax regime in a new light to encourage foreign wealth to remain in the UK. Some difficult tax changes may be kicked into the long grass as Brexit takes priority.
EU law is not of direct relevance to succession planning for UK resident and domiciled clients, and we would anticipate the recent Brussels IV regulation which seeks to harmonise succession law across the EU as continuing to apply to UK nationals and UK residents in the same way it does now, because the UK did not sign up to the regulation in the first place, and it applies in the UK as it does to non-EU states.
Brexit may have a direct or indirect impact on other jurisdictions which act as a hub for cross border structuring. This may include Gibraltar, Cyprus and Malta, for example, and Brexit may have knock on effects for the Crown Dependencies (the Isle of Man, Jersey and Guernsey).
More generally, our client’s businesses, investments, their immigration position and any international connections define the advice which we give them on their estate planning strategy and all these will be affected by Brexit. We will endeavour to stay close to our private clients and understand their concerns so we can give them the most appropriate advice.