On 23 June 2016 more than 30 million people in the United Kingdom took part in a referendum to decide the UK’s future within the European Union, with 52% of people voting to leave the EU. What followed has been described as the Brexit (Britain’s exit from the EU) ‘earthquake’.  The aftershocks were felt worldwide, resulting in significant uncertainty for EEA nationals, their families, businesses based in the UK and for British citizens residing elsewhere in the EU; with many already looking at the options available to them.

However, whilst politically and symbolically significant, it is important to note that the referendum result has no immediate legal effect; the UK continues to be a member of the EU. This will remain the case if and until the UK formally leaves the EU, once the UK government triggers Article 50 of the Treaty on European Union (TEU) indicating their intention to leave and thereafter a minimum notice period of two years served. It will be during these two years that the UK will negotiate its terms of withdrawal from the EU and the full impact of Brexit will not be known until the negotiations have reached a settlement.

Amidst the ambiguity and in the short term, EEA nationals and their family members are already taking steps to protect their positions and avoid uncertainty. In addition, the Government has provided assurances that ‘when we do leave the EU, we fully expect that the legal status of EU nationals living in the UK, and that of UK nationals in EU member states, will be properly protected.’[1]

Whilst it is likely that EEA nationals currently in the UK, and British expatriates abroad, will be accommodated in one form or another, the position for those not exercising treaty rights and those arriving post referendum is less clear and will ultimately depend on the final trading position. The key will be whether our newly negotiated relationship with the EU includes reciprocal free movement arrangements. If EU free movement comes to an end, EEA nationals and their family members may face visa restrictions.

As a result of Brexit, a new trend is emerging of high net worth British expatriates living in the EU seeking second passports, most notably from European countries such as Cyprus and Malta, where citizenship can be obtained in a relatively short period of time. This trend is driven by a desire to ensure they retain the rights of free movement afforded to them as European nationals, post Brexit. Correspondingly, for those who were using European citizenship programmes as a gateway to the UK, these programmes have lost a significant part of their attraction. For those in this position it is likely they will return to the more traditional entry route to the UK under the Tier 1 (Investor) programme, which previously saw a huge decline in applications when the investment amount was increased to £2 million in November 2014.

Whilst a lot remains uncertain and it will take time for the rubble to clear, there are steps that individuals can take to protect their positions, for example, applying for EEA registration certificates and permanent residence where possible. From a UK perspective, the Government has made clear their commitment to attracting ‘talented individuals to live in the UK who will help to contribute to the success of this country by investing here and creating jobs’[2] and this is likely to continue in a post-Brexit world.

Although we do not know yet what form any changes will take it is important to remember that the UK government has a long history of consulting with business and it is likely that future changes will be published well in advance of any implementation to allow sufficient time for individuals and business to react. Now is the time when individuals and the business community need to form part of the debate so that the best results can be achieved during the negotiation period.

Author: Julia Onslow-Cole, Partner, Legal Markets Leader & Head of Global Immigration, PricewaterhouseCoopers Legal LLP
www.pwclegal.co.uk

[1] Statement on the status of EU Nationals in the UK, 11 July 2016: https://www.gov.uk/government/news/statement-the-status-of-eu-nationals-in-the-uk

[2] Government’s Consultation on Reforms to the taxation of non-domiciles, 30 September 2015: https://www.gov.uk/government/consultations/reforms-to-the-taxation-of-non-domiciles/reforms-to-the-taxation-of-non-domiciles