Never Mind Brexit — What About My Residence?
For those with cross-border lives, the tax and residence implications of Brexit deserve far more attention than the political headlines. We examine what matters for private clients.
Whatever form Brexit takes, it will have real consequences for individuals with connections to both the UK and EU. Residence, domicile and the taxation of cross-border income and assets will all be affected.
UK tax residence
UK tax residence is determined by the Statutory Residence Test — a framework that has nothing to do with immigration status. British nationals living in the EU will not automatically become UK tax resident when Brexit occurs, nor will EU nationals living in the UK automatically lose UK residence. The position depends on the individual's facts.
EU directives
A number of EU directives currently benefit UK taxpayers — particularly in relation to withholding taxes on cross-border income. Post-Brexit, the UK will be free to negotiate its own arrangements with EU member states, but treaty-based protections may not fully replicate the current position in every case.
If you have cross-border assets, income or family ties and have not yet taken advice on your post-Brexit position, we strongly recommend doing so before the UK's departure.