Now that the immediate consequences of the referendum and Brexit have become a little clearer, we turn to consider the implications for HNWIs and senior executives.

On 23 June 2016, in what is likely to be remembered as a historic event, the majority of UK voters decided to leave the EU. The outcome of the referendum has sent individuals, businesses and entire industries into a frenzy of uncertainty. In this briefing we examine the consequences Brexit is likely to have on European nationals and non-Europeans in the UK. We also assess in what circumstances people looking to remain in the UK should consider taking prompt action.

EU Nationals living in the UK now

Between now and the point at which the UK will officially cease to be a member of the EU, freedom of movement rights remain fully preserved. This includes the period between the date on which the UK will formally serve notification to the EU of its intention to leave under Article 50 of the Lisbon Treaty and the date on which the UK will officially exit the EU. We refer to this as the 'negotiation period'. At present, the negotiation period is set to last at least 2 years. However, this 2-year period may be varied and consequently become longer or shorter, depending on the agreement reached between the UK and EU Member States. The general consensus is that the negotiation period is unlikely to last less than 2 years.

During the negotiation period, EU nationals residing in the UK will continue to enjoy their current status.

Once the UK officially exits the EU, we anticipate that the UK government will introduce transitional arrangements for European nationals already in the UK at the time of exit. It is not at present clear what these arrangements will be, how these will be implemented and what the likely time scale will be. By way of example, European nationals who have been in the UK for a certain period of time prior to the 'cut-off point' may be able to remain in the UK without needing to go through new visa processes.

For people wanting to consolidate their UK immigration status, we would advise that they do so as soon as possible. It is unclear whether, to benefit from transitional arrangements, EU nationals would need to show that they have been in the UK prior to the date of the referendum, the date of the Article 50 notice or the date of the formal exit from the EU. The latest news indicates that an Article 50 notice is unlikely to be served before 9 September 2016 (when Prime Minister David Cameron is due to leave office) and the most cautious approach is to treat this as the deadline. If this is not realistic, then steps should be taken by the end of the negotiation period.

What steps are these? Generally speaking, we advise:

(i) people who have been living in the UK for a period of at least 6 years to consider applying for UK citizenship;

(ii) those who have been living in the UK for 5 years or more to obtain documents confirming their permanent residence in the UK; and

(iii) those who have been in the UK for less than 5 years to consider applying for a Registration Certificate. This is a document evidencing EU nationals' right to live in the UK.

EU Nationals planning to move to the UK

For those who are not yet in the UK but who plan to relocate here in the future, much will depend on whether their plans are short or long term.

This is because after the UK leaves the EU, European nationals will need to meet the requirements of Britain’s domestic immigration laws in order to live and work here. As yet, there is little indication as to what those laws may be. Much will turn on agreements reached with EU Member States.

In other words, whereas short term relocations prior to an official UK departure from the EU will not be affected by the Brexit vote, longer term relocations need to be planned, bearing in mind the considerations set out above. For example, people who want to apply for Cypriot citizenship with a view to entering the UK and obtaining British nationality in due course may not be able to qualify for British citizenship after the usual 6 year qualification period - depending on the date they enter the UK. This of course depends on the cut-off date for qualification for any future transitional arrangements (see above – there is some uncertainty regarding this).

Non-Europeans in the UK (now and in the future)

A further aspect of the referendum result is how the question of Brexit will affect non-EU nationals who currently live in the UK or who wish to come here in the future.

Although the implications are wide ranging, for the purposes of this briefing we highlight the key immigration categories:

  • Investors – those in the UK pursuant to an investor visa issued prior to November 2014 are required to maintain qualifying investments at a certain level (typically £1,000,000 or £750,000). This means that they must 'top up' investments in the event that funds fall below that level. Given the market fluctuations triggered by the results of the referendum, we recommend that investors monitor their investment portfolios, particularly over the coming months as we enter a period of financial volatility and possible instability in the UK Government bond market.
  • Employment visas – professionals and executives who plan to move to the UK from abroad (or those whose visas are due to expire around the time of a formal exit date) would usually take advantage of the Points Based System. Such applications involve consideration by the UK immigration authorities. It is unclear whether a knock-on effect of Brexit will be changes to the Points Based System but one practical point is that the immigration authorities may be so busy that they take longer than usual to process applications.

A further point to consider is that the objective of non-Europeans in obtaining UK passports is often the ability to travel freely across Europe. Although it is difficult to predict what the future holds, it is unlikely that UK passport holders will be hindered from free travel across many European countries. It is also possible that their ability to live and work in other countries will be preserved. However, this is all subject to the terms of agreements reached with EU Member States.

Conclusion

In the current climate, UK immigration considerations must form a part of planning and strategy for both EU and non-EU nationals who wish to live in the UK in the medium to long term. Therefore, although no changes are in force as yet for EU nationals, strategies to accommodate aims and future plans should be put in place with a degree of urgency.

We will issue further updates when significant developments occur. In the meantime, if there is anything on this subject that you would like to discuss, please contact Russell Cohen (russell.cohen@farrer.co.uk; +44 (0)20 3375 7144), Elena Hinchin (elena.hinchin@farrer.co.uk; +44 (0)20 3375 7546) or Sharmila Mehta (sharmila.mehta@farrer.co.uk; +44 (0)20 3375 7324) of our Immigration team.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP,
June 2016