On the 24th of July 2019, Boris Johnson became the Prime Minister of the United Kingdom, taking on the task of completing Brexit from Theresa May. After months of turbulent deliberations and a general election, the UK will formally leave the European Union (EU) at 11:00PM on the 31st of January. This blog explores the questions raised about the impact of Brexit on the estate administration process and professionals within the industry.
Overseas assets (including property)
Life is a journey that can often take people all over the UK and overseas. In today’s society, it has become more common for people to travel and uproot their lives to another country. According to the Office of National Statistics (ONS), 345,000 people left the UK to emigrate in the year ending September 2018. Therefore, the number of UK nationals with overseas assets is likely to be substantial.
When it comes to administering a person’s estate after their death, any overseas assets will need to be dealt with in addition to all UK assets. It’s currently unclear what impact Brexit will have on assets that UK nationals held in the EU. It does, however, raise questions surrounding which jurisdictions taxes will apply, how you can protect assets from being unnecessarily taxed, and who would inherit on intestacy. It’s important for owners of EU assets, especially those of high-value such as property, to stay alert to changes in this area and update their Wills accordingly. As a professional, your clients may call on you for advice about how to best protect their EU assets so keep up-to-date with any developments.
Both Brexit and a change in a country’s leadership can have a huge impact on the currency market and cause exchange rates to fluctuate. In the last year* alone, the GBP/EUR currency rate ranged between 1.10060 to 1.17634. This means that a transfer of £100,000 could have varied by up to €17,000 when transferred into EUR**, depending on when it was made.
This level of volatility could present issues when it comes to estate administration. To maximise the value of the estate, you would want the best return when the proceeds of an asset are repatriated. Brexit and Boris’ leadership decisions are both likely to cause further fluctuations in exchange rates. Therefore, we recommend keeping a close eye on rates when transferring funds from EUR to GBP or GBP to EUR.
Brexit is likely to affect travel to EU countries. According to guidance on the UK government’s website:
“Travel to the EU, Switzerland, Norway, Iceland or Liechtenstein will change from 1 January 2021.”
This could have an impact on Executors or Administrators taking the do-it-yourself (DIY) approach on a complex estate administration case that involves work overseas. If the Executor or Administrator needed more 90 days in the relevant EU country, they may need to apply for a visa. However, for trips under 90 days, UK residents would not need a visa to travel to EU countries, Iceland, Liechtenstein, Norway and Switzerland.
Prepare your business
Lastly, Brexit is undoubtedly going to force businesses to adapt to meet new requirements. Free movement of employees and free trade in both goods and services are set to change. Therefore, it’s important for business owners to consider how it may impact your company.
The UK government’s website provides advice for business owners on what they can do to prepare. Click here to find out what guidance is on offer to your business.
Kings Court Trust aims to keep you up-to-date with the latest developments in the industry. That includes providing updates as to how Brexit may impact you as a professional. If you’d like to receive these updates straight to your inbox, click here to subscribe to the blog.