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How might Brexit affect expatriates

What are the possible key changes for expats? [published March 2016]

Several readers have been asking Connexion about the possible effects of a Brexit on expat Britons in France.

Here we recap key areas for the lives of expats that could be affected.

We would stress that, despite some well-publicised assertions to the contrary, there remains great uncertainty over the precise effects because the UK’s future relationship with the EU in the event of a Brexit is still unknown – this would depend very much on treaty arrangements to be agreed with the remaining EU states. Furthermore, legal experts Connexion consulted say the 1969 Vienna Convention cannot be relied on to protect British expats' rights (see more here).

For some matters it is possible there could be a general agreement between the UK and the EU as a whole but where this is not possible individual agreements might have to be made between the UK and each EU state.

If Britain leaves this will be unprecedented. No country has invoked article 50 of the EU treaty, its exit clause. A minimum two years is allowed for negotiations before the actual departure, however the UK government says it would be ‘difficult to complete a successful negotiation’ in this period and other countries might veto an extension, leading to the UK leaving with no replacement plan in place and “without any protection under EU law for UK citizens to live and work in Europe, or UK travellers to move about freely in Europe” (The Process for Withdrawing from the European Union).

The UK further adds that with negotiations over the exit and future arrangements, plus the renegotiations with trading partners around the world, a Brexit would realistically mean ‘a decade or more or uncertainty’.

Despite all this uncertainty, some areas can be identified which might be affected because they are linked to rights arising from EU membership. We list many of these below, which we worked out with input from Franco-British honorary avocat Gerard Barron.

Another effect which could impact on expats’ daily lives is if, as some large banks have predicted, a Brexit caused a renewed loss of value of the pound compared to the euro (15-20% according to American bank Goldman Sachs, or Japanese bank Nomura) meaning for example that British pensions, inheritances or rental income would buy less in France.

It should nonetheless be borne in mind that Britons in France have already coped with lower pound values – they approached parity with the euro a few years ago. What is more, double tax relief would continue to be available as the treaties – on death duties, income and corporation tax – already exist.

Once again, we stress that some or all of the problems highlighed here could potentially be resolved by new agreements. However it must be borne in mind that anything that is allowed for British expats in France in such agreements would also have to be permitted for French expats in the UK (or EU expats in general in the event of agreements between the UK and the EU as a whole).

• British people in France would for official purposes be considered étrangers (foreigners) and not Européens or communautaires and British people may have to swap their passports for a non-EU version.

• In an extreme scenario, it is possible that while new treaties are worked out, which could take years, British visitors and residents could be treated like nationals of certain African or south American states that have no bilateral agreements with France. British residents could – in theory - even need visas to visit France, though this situation would probably be rapidly resolved so as not to harm tourism.

• The issue of the residence rights of existing British expats in France – and French expats in the UK – would be a matter of urgency, and would be clarified in the negotiations. A recent House of Commons Library briefing document called Exiting the EU, acknowledges that “sudden curtailments of immigration status or mass expulsions/returns could create significant costs and upheavals”, adding: “One possibility is that EU/EEA citizens would continue to be allowed to live in the UK on the same basis after the UK’s exit and vice versa, if they had a ‘right to reside’ in the UK at the time.” If that was agreed then the same would apply to Britons already living in other EU states.

• With the above proviso that it is possible that rights of existing residents might be protected following negotiations, Britons living in or moving to France after the Brexit might need to apply for fixed-term carte de séjour permits to live in France and then reapply for renewal on a regular basis, as other non-EU residents are required to do. They may need to fulfill certain conditions such as proving a required skill or sufficient wealth not to be a burden on social security. However even with independent means there is under current rules no automatic right for non-EU retirees to become French residents: non-working immigrants initially apply for a one-year renewable 'visitor' permit on an individual basis (each member of the family separately), with certain categories prioritised (eg. if a person has children living in France). As for workers, ordinary applicants (those in high-level jobs benefit from special arragements) typically apply for individual permits (a spouse would apply separately) and can only bring the rest of their family to live with them after five years, by applying for 'regroupement familial'. Currently, with certain exceptions, standard residents’ cards last one year before they have to be renewed, though it is possible to request a 10-year card after five years residence.

• It is possible that Britons would be asked to take a language test and be required to take lessons if their level was not sufficient, as is required for some non-EU citizens (though rules on this vary according to the person’s situation and the grounds on which they are applying for residence rights).

• The EU rule that people are entitled to be considered ‘permanent residents’ after five years may no longer apply to Britons (though some experts say existing holders of a ‘permanent EU resident’s card’, which can be obtained from prefectures by EU residents who can prove five years' residence, may find this helps in proving they have ‘acquired a right’ to maintain permanent residence after a Brexit).

• Britons who may not meet required residence criteria or who do not want the complication and uncertainty of applying for permits would probably benefit from a transitional period in which they could if they wished sell up and go back to the UK if necessary. Values of properties in popular expat areas – especially for holiday homes - could therefore drop due to over-supply. Children would have to come out of their French schools.

• Non-EU foreigners wanting to work in France need to obtain permission and have a document proving this right - so this might apply to Britons. This can either be a visa or residence permit of a kind explicitly allowing the person to work, or it can be a separate work permit. This may apply whether the person wants to have a salaried job or set up in self-employment with a registered business. The future right to work of those already here and working must be addressed by the bilateral negotiations which would follow a Brexit; those who want to come to France afterwards would be subject to the general rule of law (as quoted) unless bilateral negotiation results in some alternative arrangement. Self-employed people and managers (dirigeants de société) would under general law also require a "carte de commerçant", again unless some alternative arrangement is negotiated.

• It is possible that, as with many other parts of the world, British state pensions for French residents would be frozen (the UK’s DWP has confirmed this would be the case if there was no new agreement on this point). If there was no ‘EU pension’ arrangement, a Briton’s pension for a period worked in France could be worth less when claimed because they would not be able to rely on a period working in the UK in order to avoid penalties for having not worked the standard number of quarters. Britons with less than 10 years of UK contributions may get nothing from the UK because periods elsewhere in the EU may be ignored and otherwise 10 years' contributions is the UK's new limit for a (pro rata) pension. (More on the EU pension rules: here).

• Various UK benefits such as Personal Independence Payment or Employment and Support Allowance may no longer be ‘exportable’ to France. Jobseekers moving to France may not be able to continue claiming UK unemployment benefit for up to three months.

• Similarly, British people in France may have less access to French benefits because they would not automatically benefit from EU principles aiming at harmonising countries’ social security rules and ensuring that EU citizens using their free movement rights are not discriminated against. For example, ASPA income support for pensioners is only available to non-EU nationals if they have had a worker’s residence permit for 10 years or more or have been paying into a French pension for 10 years or more. RSA income support for working age people (or the prime d'activité payment for workers on modest incomes) is only available to them after having a worker’s residence permit for five years or more.

• Britain would no longer issue S1 forms allowing British pensioners to have French healthcare paid for by the UK. This might mean they would have to take out private health policies (whose cost would be likely to rise steeply), or it could mean tougher checks on pensioners’ means to make sure they are not a ‘burden’ to France, before allowing them to join the French system on the basis of paying in 8% of their income above €9,611.

• If the S1 system stopped then British pensioners in France may no longer be able to obtain ‘free’ NHS healthcare on visits back to the UK. French residents may not be able to benefit from using an EHIC on visits to the UK, so would need high quality travel insurance instead because they may face charges for many types of care (though not, under current rules, for GP visits and for accidents and emergencies). The EU directive that permits French residents to travel to the UK for many healthcare procedures (apart from certain ones deemed very costly or requiring in-patient stays) and be reimbursed by Cpam with no prior authorisation may no longer apply. In general it may be hard to obtain Cpam authorisation for care in the UK to be reimbursed, as the EU S2 form authorisation system may not apply.

• If they did not have S1s then British pensioners in France might have social charges at 7.4% levied on all British pension income.

• Similarly, if they had had no S1s then British retirees living in France might not have qualified for refunds of social charges at 15.5% on income from capital and investments in 2012-2015 under the recent ‘De Ruyter’ ruling, as they could not have used S1s to show a lack of affiliation to French social security. (UK residents with French property might also not have qualified for any refunds, since the refunds result from an EU law on coordination of countries’ social security systems. UK residents may also have to once again pay a ‘fiscal representative’ to calculate their capital gains tax when selling French property).

• The property rights of Britons owning property in France would probably not be called into question, but it may be more complex for Britons to acquire French property in the future. It might be necessary for them to obtain prior permission from the Banque de France to buy in France and/or to obtain a French mortgage, as was the case before the UK joined the EEC. (Purchases below a certain threshold might be exempt). Before EEC membership a prior declaration was also sometimes required for sales and in some cases express consent was also required. Consent was also formerly required for people to set up companies in France, including SCIs.

• Mutual recognition and enforcement of all court judgments, including in particular child custody decisions, would be brought into question, creating difficulty for British citizens who wish to rely on them.

• There may be longer waiting at airports when flying between France and the UK, because travellers may not be able to go through EU gates at customs and passport checks.

• People taking flights between the UK and France would probably no longer be protected by EU rules on compensation for delays, cancellations and overbooking, as these are only for flights leaving an EU airport or arriving in the EU with an EU company.

• It may no longer be possible for French residents to do a year in the UK as part of the Erasmus university exchange scheme and students wanting to do full courses at UK universities might be charged high international rates which can be almost double the cost to UK or EU students. Students from France doing courses in the UK may no longer qualify for a UK student loan, which can cover course fees and is only repayable if and when you are earning above a certain level. (However young people from expat families might still be able to qualify to be treated like an EU citizen if they can show they have maintained close links to the UK, such as with regular visits to relatives).

• Britons may not be able to vote in local mairie elections or become councillors and they could not vote for or be represented by a French MEP.

• British Prime Minister David Cameron and former UK ambassador to France Sir Peter Ricketts say there is a risk that ‘the Jungle could move to Dover’, because the strong UK-France cooperation at Calais relating to migrants seeking access to the UK may be disrupted. Sir Peter said France deploys 1,000 of its top riot police there. He said: “We get a secure border and the French carry a lot of the load. They are doing it because they see us as a very important ally in the EU. If that stopped, the incentives change for France.” Alternatively if France ceases to police the tunnel and port the burden may be placed on the ferry companies and Eurotunnel to prevent migrants boarding, which would put up ticket prices.

• British driving licences may only be valid in France for one year before having to be exchanged and registering a British car for French plates may be more complex.

• Currently blue disabled people's parking badges are standard in the EU - so, French ones might no longer be acceptable in the UK.

• Donations to British charities might no longer be tax deductible.

• It may be harder for UK qualifications to be accepted, as EU mutual recognition rules would not apply and access to certain professions may be more limited.

• Britain might no longer be bound by the EU directive that will shortly require its banks to allow residents in other EU countries, such as France, to open new accounts.

• Sending a letter between the UK and France might cost more and using a mobile phone, whether for calls or internet, could cost more if using a French mobile in the UK because EU rules limiting roaming charges may no longer apply.

• Air travel could become more expensive. The chief executive of easyJet, Carolyn McCall, recently said a Brexit could cause a return to the days when flying was “reserved for the elite” because she said Britain’s influence in Europe had played a key role in keeping fares low.

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