Europe Focus January 2019

Happy New Year and welcome to Europe Focus, bringing you news and opinions from Sovereign’s offices across Europe, covering our range of products and services including Corporate Services, Private Client Services and Retirement Planning.

The defeat in Parliament of the Withdrawal Agreement and Political Declaration on the UK’s future relationship with the EU by a historic margin of 432 to 202 means that the Brexit uncertainty continues. The result seems to show emphatically that the draft deal, constructed by the UK government and the EU over the past two-and-a-half-years, is now politically dead.

The default position if the UK cannot agree a deal by the 29 March Brexit deadline would be that the UK leaves the EU with no agreement in place. After the defeat, Theresa May said that she did not intend to “run down the clock” to force parliament to choose between her deal and a ‘no deal’. “That is not our strategy,” Mrs May told parliament. “I have always believed that the best way forward is to leave in an orderly way with a good deal.” She said that she would be willing to collaborate on what the next steps should be.

No doubt businesses, both inside and outside the UK, have been working on ‘no-deal’ contingency plans for some time and are prepared for this scenario. Given the uncertainty that the parliamentary vote brings, firms should continue to keep their ‘no-deal’ contingency plans under review. Our UK team is well placed to assist uk@SovereignGroup.com

For 2019 we have relaunched our Citizenship and Residency full service offering -providing Citizenship by Investment schemes in Cyprus and Malta and residency schemes in Cyprus, Malta, Gibraltar and Portugal. Please click here to download a brochure and find out more.

Brexit and Fiscal Representation in Portugal

With Brexit, will UK residents once again need to appoint a fiscal representative? The law clearly states that non-residents who are not nationals of EU member states must appoint a representative, so it follows on that, yes, UK residents will be required to appoint a fiscal representative in Portugal. The onus is on taxpayers to be aware of and to comply with the law. Read more…

Guernsey a frontrunner for International Savings Plans / Gratuity Schemes

Guernsey is now able to offer formally recognised, tax exempt international savings plans and gratuity schemes, particularly attractive for those wanting to offer their employees the ability to withdraw a lump sum distribution on leaving employment (such as End of Service Benefit provisions in the GCC region), with no minimum retirement age to fulfil in order to do so. Read more…

Domicile rulings for UK expats

There are many thousands of British citizens that have settled overseas and intend to reside indefinitely in their country of habitual residence but who remain subject to UK Inheritance Tax on their global assets come their demise.

UK citizens that live overseas and do not intend to return to the UK should request Sovereign to obtain a professional and independent tax ruling to confirm that they are no longer UK-domiciled and that their non-UK assets should therefore not be exposed to UK IHT at 40%. Read more…

Crown Dependencies issue new substance requirements

All three of the British Crown Dependencies – Guernsey, the Isle of Man and Jersey – have tabled legislation that will introduce new substance requirements for tax-resident firms engaged in certain industries. It will be effective for accounting periods commencing on or after 1 January 2019. Read more…

The danger of underinsurance for high net worth individuals

Some 54% of high net worth individuals (HNWIs) believe they are underinsured according to a recent survey commissioned by Chubb, one of the world’s largest insurance companies. This is a worrying statistic, not least because HNWIs typically have large property portfolios, as well as high-value assets and collections such as fine art, wine or classic cars. However, it’s little wonder that so many wealthy individuals have inadequate cover – Chubb also found that just 19% of HNWIs use a specialist insurance broker. Read more…