There is currently very little movement between the UK and EU countries. When this resumes we must reconsider the position of UK expats and those thinking of moving to the EU to lock in protections for residence, healthcare and pensions, notes Jason Porter.
What changed on 31 January?
There is little change for UK nationals living in the EU during the transition period, who will retain freedom of movement, the right to remain and access to broadly the same benefits as EU citizens.
UK nationals who are lawfully settled in an EU state before the transition deadline can lock in a lifetime of citizens’ rights under the UK/EU Withdrawal Agreement. These benefits are protected for as long as they are resident in that country.
What does the Withdrawal Agreement say about residency?
Proof of residence
To be covered by the Withdrawal Agreement, expats must be settled in their chosen country before 31 December 2020 and apply for updated residence documents before 30 June 2021.
Expiry of residency rights
Expats will lose permanent residency status (and associated EU rights) if they are absent from that country for five consecutive years or more.
What does the Withdrawal Agreement say about healthcare?
Existing entitlements to healthcare will continue for settled residents using the S1 Form.
While the European Health Insurance Card (EHIC) will also provide free emergency care while travelling in other EU states, UK-issued EHICs will only remain valid up to the end of the transition period.
What does the Withdrawal Agreement say about pensions?
UK retirees settled in the EU will continue to receive yearly cost-of-living increases to their State Pension payments. This will apply even if they start claiming their pension after 2020.
Brexit should not affect how they can withdraw or transfer other UK pensions. However, the UK currently applies a 25% ‘overseas transfer charge’ on pension transfers outside the EU/ EEA. This could be easily extended once the UK is no longer in the EU.
What happens after the transition period?
When the transition period expires on 31 December 2020, automatic freedom of movement will end for UK nationals and a new application process will apply to live or work within the EU.
Under current rules for non-EU/EEA nationals, each person needs to be able to demonstrate a minimum income to qualify for residence in an EU country, at least equivalent to the national minimum wage
Brexit beyond 2020
While the Withdrawal Agreement allows for an extension to the transition period (12 or 24 months), Boris Johnson’s Brexit legislation has ruled this out.
Although there may still be the chance of a cliff-edge Brexit and ongoing uncertainty in 2021, the transition period offers a window of certainty if expats and would-be expats act this year.
About the author
Jason Porter is a Director of Blevins Franks, which provides international tax and wealth management advice to Britons living in France, Spain, Portugal, Cyprus, Malta and the UK, through 22 offices.