First of all, it’s important to understand that a no motion vote of the British has been adopted, the outcome is unclear concerning the exit of the European Union or the wish of the United Kingdom to stay. As a result, the situation is uncertain, it is necessary to remain very attentive in the future to keep updated with the latest decisions being made.
Can BREXIT impact real estate values and what are the impact on investments?
The housing market in London has been stagnant for several years and real estate statistics have shown a decline in average real estate prices in the UK. If there is a “No Deal” between the UK and the European Union member states, an estimate has been made of a 25% to 35% fall in real estate prices over 3 years, and who knows, certainly a decrease in the value of the pound Sterling.
Our team can assist you with tailor-made solutions to optimize all your financial and legal requirements or real estate planning needs during this transition period of BREXIT.
Will the exit of the United Kingdom from the European Union lead to tax changes, both for British residents in France and for French residents in the UK?
In this situation, the end of BREXIT with a “No Deal” (or not) won’t change anything, Whatever happens, tax for residents and non-residents will be changed. Households may have new tax laws. The same applies for companies that are closely linked to one country. There will be fiscal friction. For example, the VAT regime for transactions made with the United Kingdom will no longer be harmonized with the rest of Europe. A French company which realizes taxable operations for VAT purposes with the UK will be obliged to declare and pay VAT due to the UK tax administration.
Without an agreement on leaving the European Union, companies from the United Kingdom will no longer benefit from exemption on withholding taxes on French-sourced dividends . The threshold of ownership is between 5 and 10 percent. Over and above this the dividends paid by a French company to a British company with a set 10 % ownership will suffer a withholding tax of 15 percent in accordance with the tax concentration of 19 June 2008.
There are also other ramifications to take into account:
- The effect on capital gains taxes
- Social charges on investment income
- The possibility of an exit tax on changing one’s tax residence to settle in the United Kingdom
What are the effects on the depreciation of financial assets, will this impact the stock markets?
The announcement 2 years ago of the UK’s exit from the European Union shook the financial markets, including the pound Sterling. We can’t precisely predict the impact of BREXIT, however, we expect strong disruptions in the financial markets. In addition, for more than a year, many UK company are seeking to relocate their headquarters to neighboring countries, notably Paris which Is good for the French economy.
Within our office, we are able to provide portfolio management, modify your old investments related to UK funds to limit risks when possible, advise you of new investments that are safe and profitable, as well as assisting companies to relocate when required.
If you need a team of experts to assist you with wealth planning and management in the situation of BREXIT, Anthony & Cie will offer its expertise to create a real-added value for your interests.
Article written by Nathan Binet, Business Developer at Anthony & Cie in collaboration with Robert Anthony