After months of wrangling, the UK government is set to sign a post-Brexit trade deal with the European Union.
It seemed like no-deal was going to be the most likely outcome, but on 23 December media reports said that a deal was close to completion.
At the time of publication, there is no knowledge of what the deal contains, but reports suggest that financial services will not be part of this Brexit deal.
There is expected to be an announcement by UK prime minister Boris Johnson at some point on 24 December and the deal is set to be discussed and voted on in the UK parliament on 30 December.
International Adviser spoke to members of the advice industry to see what this news will mean for UK expats in the EU.
Michael Lodhi, chief executive of the Spectrum IFA Group, said: “Like both EU and UK citizens, including UK MPs and EU MEPs, I have no idea of the detail included in ‘the deal’. One thing is clear, financial services passporting between the UK and EU is coming to an end on 31 December 2020.
“This impacts UK expats living in the EU. If they are being advised by UK IFAs or investment managers, that advice and service will cease on that date unless the UK firm has set up an EU licensed business.
“If a deal is agreed, then I would expect the EU and UK to commence talks around other areas of trade, hopefully with financial services near the top of the list.”
Finn Houlihan, managing director at ATC Tax, said: “When you look at the headlines, it’s all about the trade deals. I haven’t really seen much on financial services.
“If you think a typical expat, gone to Spain, Portugal, France, a lot of their income is going to be derived from the UK in some shape or form, so their advice will be from the UK through passporting.
“Someone in Marbella is going to be less affected by a goods trade deal. But services is where they’re going to be most affected. A lot of expats will continue receiving advice from the UK, through passporting, so that’s the big thing.”
‘Major period of readjustment’
Nigel Green, DeVere Group chief executive, said: “The Brexit deal is good news for expats in Europe who would have likely been disproportionately affected by the UK crashing out with no deal.
“Their pensions, insurance and healthcare could have been adversely affected overnight.
“However, there will still now be a major period of readjustment and this could impact on foreign exchange, retirement planning, investments and tax planning, amongst other issues.
“Most expats still retain some financial links with the UK and therefore need specialist cross-border financial advice. In a post-Brexit world, with the complexities increasing, this will become more essential than ever.”