Fears of ‘no deal’ Brexit caus­ing sleep­less night for Cyprus ex­pats

Financial Mirror (Cyprus) - - CYPRUS - By Michael Do­herty

Lack of clar­ity about the terms of Brexit is caus­ing huge con­cern to Bri­tish in­dus­try, com­merce and to the 1.3 mil­lion cit­i­zens of the United King­dom liv­ing in Cyprus and through­out the Europe Union. Their chief fear is that the UK will de­part with­out a deal of any sort.

Early in the process, Prime Min­is­ter Theresa May de­clared that ‘ no deal is bet­ter than a bad deal’. That slo­gan was all very well when it seemed cer­tain there would be a deal of some sort but, as the exit date draws nearer, un­cer­tainty is cre­at­ing real distress.

These fears were ex­ac­er­bated this week as May was hu­mil­i­ated when EU lead­ers took it in turns to rub­bish her Che­quers plan at the sum­mit in Salzburg, fur­ther un­der­min­ing her author­ity and in­creas­ing the like­li­hood of a hard or ‘no deal’ Brexit.

In­dus­try faces the big­gest chal­lenge, but the dif­fi­cul­ties for ex­pats are also daunt­ing. UK con­sumers could face slower and more costly credit card pay­ments when they buy EU prod­ucts. Bri­tish cit­i­zens liv­ing abroad could lose ac­cess to pay­ments from their bank ac­counts, and have dif­fi­culty re­ceiv­ing pen­sion pay­ments. Health care ar­range­ments could be threat­ened.

Ar­dent Brex­i­teers dis­miss these warn­ings scare­mon­ger­ing. But, while ev­ery­one hopes the worst

as will not hap­pen, nonethe­less.

In March it was agreed that a 21-month tran­si­tion pe­riod would post­pone the full ef­fects of Brexit un­til the end of 2020. The work­ing as­sump­tion is that even if noth­ing else is agreed, this tran­si­tion pe­riod will still ap­ply.

Dur­ing this phase, EU cit­i­zen­ship and as­so­ci­ated rights will con­tinue for Bri­tons, al­low­ing busi­nesses and cit­i­zens more time to pre­pare for changes that will even­tu­ally come. For ex­pa­tri­ates, this ex­tends the dead­line for se­cur­ing res­i­dency and lock­ing in ex­ist­ing EU ben­e­fits to 31 De­cem­ber 2020.

But, be warned. If the two sides can­not agree the fi­nal terms of a with­drawal treaty, it is pos­si­ble that the orig­i­nal Brexit cut-off date of 29 March 2019 will ap­ply.

Ei­ther way, once Brexit takes full ef­fect, au­to­matic free­dom of move­ment for Bri­tons will end and a new ap­pli­ca­tion process will ap­ply for liv­ing or work­ing within the EU. Bri­tish cit­i­zens liv­ing in an EU coun­try, but not yet reg­is­tered with the lo­cal au­thor­i­ties, should do so ur­gently to help demon­strate that they are legally res­i­dent and there­fore el­i­gi­ble to ben­e­fit from the cit­i­zens’ rights agree­ment. If pos­si­ble, they should take other steps to help prove set­tled sta­tus, such as reg­is­ter­ing for the elec­toral roll or join­ing the lo­cal health­care sys­tem.

The cit­i­zens’ rights agree­ment of 2017 com­mits Bri­tain and the EU to main­tain­ing ex­ist­ing res­i­dency rights for UK and EU na­tion­als ‘law­fully re­sid­ing’ within ei­ther area. So, a Bri­tish cit­i­zen legally set­tled in an EU mem­ber state be­fore with­drawal would keep the right to stay there for as long as

it makes

good

sense

to

pre­pare

for

it they re­main res­i­dent in that coun­try.

For pen­sion­ers, un­cer­tainty over Brexit is the cause of sleep­less nights. Their plans for a care­free re­tire­ment have been rocked and many fear that any changes to cur­rent health care ar­range­ments could be a dis­as­ter.

More than half a mil­lion Bri­tish pen­sion­ers are liv­ing in other EU coun­tries but the idea that only el­derly Bri­tons live abroad is sim­ply not true. For every Bri­tish pen­sioner liv­ing in an EU coun­try there are two Bri­tons of work­ing age.

They will be fer­vently hop­ing for a deal be­tween Bri­tain and the EU but they should also be mak­ing plans for how to live with­out one.

The un­cer­tainty about how and when Bri­tain will take its leave has raised im­me­di­ate con­cerns, such as how to deal with ex­change rate fluc­tu­a­tions.

A for­ward con­tract op­tion from a cur­rency bro­ker­age will al­low you to lock in a cur­rent rate for up to 12 months.

If you plan to send money in stages, such as a pen­sion fund or stu­dent al­lowances, a reg­u­lar pay­ment plan will al­low you to send funds through­out the month at an agreed rate, which in most cases would be bet­ter than of­fered by a High Street bank. Michael Do­herty is CEO of Li­mas­sol-based Wood­brook Group, reg­u­lated by CySEC with ex­per­tise in In­vest­ment and Wealth Plan­ning, QROPS, SIPPS, Trust and Trus­tee Ser­vices, Tax­a­tion, Ac­count­ing, Au­dit and Le­gal ser­vices, Com­pany For­ma­tion and Ad­min­is­tra­tion, Cross-Bor­der Struc­tur­ing, Domi­cil­i­a­tion and Cor­po­rate Ser­vices among oth­ers. www.wood­brook­group.com

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