Family Office

GUEST ARTICLE: Brexit And The Implications For Family Offices

Charles Avens, Druces , 12 September 2016

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How will the UK's departure from the European Union affect family offices? This article delves into some of the details.

The decision by UK voters in late June to vote against continued membership of the European Union sent shockwaves around markets and the political world, confounding pollsters – yet again – and upsetting right-thinking opinion, including opinion in the City and wider financial world. Conventional wisdom – which is often wrong – has it that the loss of EU membership will be a net blow to the UK’s financial services industry, although more recently the economic data seems to suggest that life away from the embrace of Brussels might not be as bleak as feared. Regardless of the pros and cons and the continuing arguments, this publication will continue to track how departure from the EU will affect the wealth management sector. For example, there is the potential impact on non-domiciled residents in the UK (see here). One sub-sector of wealth management is the family offices area. How will Brexit affect these often discreet and little-understood institutions? What particular questions will the heads of family offices have about Brexit and the new world they face? Tackling some of these questions, Charles Avens of Druces LLP’s employment and immigration team, writes here. 

As is always the case, the editors of this publication do not necessarily endorse all the views of guest contributors and we invite readers to respond. They can contact us at tom.burroughes@wealthbriefing.com or +44 207 148 0178.
  
The vote to leave the EU appears to have taken everyone by surprise, including members of the UK government. Many observers have been amazed by the clear lack of preparation by the UK government for a possible Brexit vote, despite the closeness of the opinion polls.  

Employers and EU nationals alike are anxiously awaiting confirmation that their right to live and work it the UK will be preserved when Britain finally withdraws from the EU. This is drawn into sharp relief by a report from the Social Market Foundation, an independent UK public policy think-tank, released in July 2016. It suggests that more than half a million of the 3.6 million EU residents currently living in the UK may not have qualified for permanent residency by the time of Brexit. 

Protecting the rights of EU nationals is now a number one priority for employers and individuals – unsurprisingly immigration lawyers have been flooded with questions since 24 June. 

Family offices must consider how the changing European Union framework will affect their operations: goods, capital, services and perhaps most importantly, people. Any family office employing EU nationals in the UK should consider taking urgent action to review and protect their position for the future.

The status quo
It appears that, until serious negotiations are at least started (and possibly completed) between the UK government and the EU, it will be impossible to say for certain what the position of an individual EU national living in the UK will be once the UK finally leaves the European Union. However, following the recent Cabinet meeting at Chequers, it appears clear that restrictions on EU nationals coming to the UK will certainly be imposed after the UK leaves the EU.

At this stage, the following points are clear:

1, Any EU national currently living in the UK and exercising Treaty rights, e.g. by working, will have the right to remain in the UK exercising EU Treaty rights until the UK leaves the EU; and 

2, Any EU national wishing to come to the UK between now and the time the UK leaves the EU will also have the right to reside in the UK and exercise Treaty rights.

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