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June 2017

One year on from the Brexit vote: where are we now?

Published: Friday 23 June 2017

By Rachael Kinsella

One year on from the referendum, it’s reassuring to see that everyone wants to remove the uncertainty from Brexit. Michel Barnier, in his capacity as chief EU negotiator for Brexit, commented in the joint EU-UK negotiations press release, “We must lift the uncertainty caused by Brexit.”

“Hear, hear!” says David Johnson, founding director at currency specialists, Halo Financial. “It’s reassuring to see that first on the agenda for agreement includes the rights of expats – something that has been playing on our clients’ minds for well over a year. Whether that’s UK citizens retaining rights while living in the EU, or employers wishing to protect the rights of EU citizens in the workforce, this is a considerable cause for concern for many.”

The two-day Brussels summit to kick-start negotiations centres on the key requirements for a smooth Brexit, including migration, the economy and security. Senior officials from the UK and the EU have been clear about the need to protect the rights of the 900,000 British citizens overseas and approximately 3.2 million EU nationals living in the UK, but nothing has been decided so far.

 “Until negotiations get under way, we will be none the wiser as to how these rights will take shape, and the uncertainty is playing havoc with any plans for expats and for businesses alike,” continues Johnson.

“We await the outcomes of these key discussions with anticipation,” Johnson adds, “and we will continue to explore the pressing issues and assess the implications for private and business clients alike.”

How has the Brexit vote affected UK buyers of EU property?

In the short term, Brexit-triggered currency movements affected affordability of overseas property for British buyers, particularly in popular destinations throughout Europe and the USA. This appears to be having more of an effect on buyers of holiday homes, rather than those looking to emigrate or retire abroad.

A recent survey by Halo Financial found that currency volatility was having a negative impact on overseas property transactions:

How did the exchange rate volatility after the referendum affect the overall cost of your purchase? (Source: Halo Financial)

Despite ongoing uncertainty and the dramatic effect this has had on the Pound, those wishing to build a new life in the EU have not been as deterred as you may think. The Halo Financial survey found that 62% of respondents said “no” or “not really” when asked if Brexit influenced their overseas property purchase.

Peter Robinson, CEO of the Association of International Property Professionals (AIPP), commented, “Online searches from the UK to move to such countries as Australia, New Zealand and Canada have certainly spiked following the referendum.”

Potential impact of Brexit for overseas property owners

Robinson believes there will need to be some form of agreement to take into account the rights of expats who contribute significantly to individual EU economies. He comments,
“More than 1.2 million British expats live in (mainly) Spain, France and Ireland, with an estimated 1 million plus British residents who also own property in the EU and visit regularly for holiday or retirement purposes. It would be folly for an EU (political) decision to dis-incentivise these 2.2 million British people from spending their money in EU countries.”

 What could change for expats following Brexit?
  Potential change
Implicationsfor overseas property owners
Visas may be required to visit some European countries
Could be expensive or administratively difficult as countries impose reciprocal limitations
Existing tax harmonisation treaties will need to be re-thought
and re-negotiated – avoiding the jeopardy of being taxed twice
Financially hard-pressed EU countries could hike taxes on foreign property owners to raise revenue
New passports will have to be issued
Reminder of UK’s solo status for emigrants
Pound may rise against the Euro in late 2017
if economy improves
Unlikely that currency controls restricting the amounts that individuals can transfer between countries will be put in place
Freedom of movement a key issue in national elections throughout EU
European host countries may increasingly view foreigners with suspicion

Although we do not have any facts about the outcomes of the negotiations at this stage, we have consulted a number of advisors and experts to look at areas where individuals can plan ahead as much as possible and allow for change.

“We discuss a range of perspectives on this and other important aspects of Brexit in our new publication, Vision: Brexit” David Johnson concludes.

Find the AIPP’s 20 Key Points of Issue facing British owners of a foreign property, sent to Minister for Brexit, David Davis, at http://www.aipp.org.uk/resources/publications

About Halo Financial

Halo Financial is a leading UK foreign exchange brokerage, offering a comprehensive range of services to individuals and businesses since its inception in 2005. The business prides itself on offering a flexible and personalised approach for each of its clients, simplifying the seemingly complex foreign exchange market to maximise savings in currency transactions, protect against currency risk and make money go further.

Staffed by qualified technical analysts, the company is authorised by the Financial Conduct Authority and HM Revenue and Customs.

“Excellent”, “Reliable”, “Professional”, “Knowledgeable”, and “Helpful”– just some of the great feedback received as a Gold Trusted Service Provider for Feefo.com. The team at Halo are proud that customers rate their services so highly and are happy to recommend to others. The company is always striving to provide the best possible service and to innovate services and products in line with customers’ ever-evolving needs.

Halo Financial won Best Customer Focus category in the 2016 Best Business Awards; received OPP Gold for Best Supporting Service; the Gold Award for Financial Support and Innovation from Relocate Magazine, Commendations in the 2016 and 2017 Moneyfacts Awards and has 5 out 5 Star Customer Gold Merchant Status via independent review website, Feefo.com, winning their Gold Trusted Service award. 

For more information, infographics and the latest currency insights, visit www.halofinancial.com/news