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Brexit: what does it mean for Private Clients?

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There should be no immediate changes to the UK’s tax rules as a result of the decision to leave the EU – although rates could be changed in an Emergency Budget.

There should also be no immediate impact on the position of EU nationals living in the UK, or UK nationals living elsewhere in the EU.

Here we look at what impact the vote could have on the tax rules in the longer term.

Key points:

  • There should be no immediate changes to the UK’s tax rules. The Government must give two years’ notice to terminate EU membership, and it is unlikely that there would be significant changes to the tax regime until the UK has formally left the EU. However, rates could be changed by a budget, emergency or otherwise.
  • There should be no immediate changes for UK nationals living elsewhere in the EU or EU nationals living in the UK.
  • Rates of UK tax may have to increase and certain reliefs may be restricted – income tax and inheritance tax (IHT) may be the targets for tax rises.
  • Further details on the changes to the taxation of UK resident, non-UK domiciled individuals, in particular in relation to the taxation of non-UK trusts, are now unlikely to be published before the Autumn, and may be delayed until early 2017. However, it is unlikely that those changes will be abandoned or delayed beyond April 2017. You should therefore be considering options now, rather than waiting for the guidance.
  • It is unlikely that there will be any slow-down in the drive for tax transparency, or exchange of information between jurisdictions.
  • The degree to which the UK can benefit from any upsides of leaving the EU, from a tax perspective, will depend substantially on its ability to renegotiate beneficial terms with its trading partners.
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