BREXIT: What UK expatriates need to know about the Withdrawal Agreement
The UK officially left the EU on 31 January 2020. The Brexit transition period is now underway and is set to run until 31 December 2020. During this time things should generally remain as is for expatriates living in the EU. However, time is moving on for UK expatriates to enable them to lock in protections for residence, healthcare and pensions.
What changed on 31 January?UK MEPs have stood down and no longer have decision-making or voting rights within the EU. However, during this transitional period, the UK is still being treated as an EU member state bound by EU rules and paying into the EU budget with the freedom to negotiate trade deals with other countries outside of the EU from 2021. For UK nationals living in the EU and for EU citizens living in the UK little has changed. During this transitional time both UK and EU nationals will retain the right of freedom of movement, the right to remain and the right to access broadly the same national benefits on offer in the UK or EU member state. There are some exceptions however; UK nationals living in France are no longer able to vote or stand in their local elections. After 2020 there are currently no protections for UK nationals arriving in EU member states or for EU citizens arriving in the UK.
What about UK Nationals wanting to settle in the EU?UK nationals who are lawfully settled in an EU state before the transition deadline are then able to secure a lifetime of citizens’ rights under the Withdrawal Agreement. These benefits are protected for as long as the national remains a resident in that EU country. Where updated residence documents are required, you will need to apply before 30 June 2021. If you already hold permanent residence there is no cost to convert your paperwork. Partners and dependent family members can join settled residents in an EU country, so long as the relationship is established before 31 December 2020. You will lose permanent residency status (and associated EU rights) if you are absent from that country for five consecutive years or more.
What happens to onward freedom of movement in 2021?The UK citizens’ rights only apply to the EU country you are resident in before the transitional period ends. After 2020 you cannot automatically work or reside in another EU state where instead you may have to apply for such authority as a non-EU/EEA ‘third country’ national.
What about UK National healthcare in the EU?UK-issued European Health Insurance Card (EHIC) will remain valid up to the end of the transitional period. Existing entitlements to healthcare will continue for settled residents in their chosen EU state where the S1 Form system will carry on providing free cover for UK pensioners and those receiving certain long-term benefits, as well as their dependents. In France or Spain if you do not hold the S1 Form then you may be asked to show evidence of comprehensive private health cover to join the local healthcare system.
What about UK pensions in the EU?Retired UK nationals settled in the EU will continue to receive yearly cost-of-living increases to their State Pension payments. This applies if you meet the conditions to qualify for a UK State Pension and even if you start claiming your pension after 2020. Brexit should not affect how you can withdraw or transfer UK pensions. However, it is worth considering the UK currently applies a 25% ‘overseas transfer charge’ (an exit tax) on pension transfers outside the EU/ EEA. This could be easily extended once the UK is no longer bound by EU freedom of movement of capital, so time may be limited to effect transfers without penalties.
What happens to UK national rights in the EU post the transitional period?After 31 December 2020, the transitional period will expire and all automatic freedom of movement for UK nationals into an EU member state will end and a new application process will be required for UK nationals to live or work within the EU. EU residence will still be possible to acquire. However, if the UK fails to secure new agreements with EU countries in time then it is most likely to require a more formal vetting process. Under current EU for non-EU/EEA nationals the individual needs to demonstrate a minimum income to qualify for residence in an EU country equivalent to the national minimum wage.
What about after 2020?The Withdrawal Agreement allows for an extension to the transition period for 12 or 24 months. However, UK Brexit legislation has ruled these options out. 2021 may still offer three potential scenarios where –
- The UK ratifies a new trade deal with the EU and a new relationship commences
- The UK amends its legislation to extend the transition period to allow negotiations to continue
- There is a no-deal scenario and the UK cuts all trade ties with the EU
BREXIT: What UK expatriates need to know about the Withdrawal Agreement The UK officially left the EU on 31 January 2020. The Brexit transition period