What we know, don’t know, and can’t know about Brexit

BREXIT: With the current situation as it stands, you can imagine that my conversations tend to follow a common theme. I am starting to sound like a politician.

30 October 2019
By Robert Kent

“There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say, we know there are some things we do not know.

“But there are also unknown unknowns – the ones we don’t know we don’t know.”

That is not me, but Donald Rumsfeld, the former US defence secretary in 2002.

So why am I repeating a 17-year-old quote? As much as we all laughed at these words of “wisdom” at the time, they do a great deal to explain the situation with Brexit for those moving to or living in France who are struggling to make plans. We can use Mr Rumsfeld’s words to separate the fact from the fiction.

The known knowns

We know the rules on French residency for a non-EU citizen. Non-EU citizens move to France all the time.

Essentially, the most important rule is not to be a liability to the state, either fiscally or in any other way.

Most people thinking of moving to France are looking to do so under their own steam, with no plan to take any money from their new hosts.

Many have rushed out to get an EU passport but, logically, it is unlikely that there will be a new rule aimed at British citizens and another aimed at those from anywhere else in the world.

The ability to move freely across borders may disappear, but the ability to move to and live in France is a known quantity.

The rules are not likely to change from what they are currently for non-EU citizens.

Regarding taxation, there is a tax treaty between the UK and France. It existed long before the EU, or even the EEC. It is a bilateral agreement between the UK and France, so completely unrelated to the EU.

This means that we know everything there is to know about tax after Brexit, no matter what the shape of it. There is also a succession treaty, so none of the rules change here, either.

The known unknowns

We are then left with the problems that we know about but about which we can draw no firm conclusions.

We have no idea what will happen with access to healthcare for retirees: either there is access via the S1 or there is not. My advice is to accept that it is gone and plan accordingly.

What we do know is that EU law means that the French cannot prohibit any nationality from joining the health system.

Beyond the S1, this may mean either paying into the system in the form of the CMU or working.

What will happen with the currency? We are left with conjecture. We can assume that if there is a deal or a cancellation, sterling will strengthen.

If not, then it may weaken further.

The unknown unknowns

These are difficult to deal with, without really sounding like you have lost the plot entirely.

Will France bring out rules that are just for UK nationals, so one rule for the world and another for Britons?

Who knows, but it seems very unlikely.

But they may, in theory, ditch the tax treaty, make English illegal and impose a death sentence on anyone caught playing cricket on French soil.

If a deal gets done, what does that mean? The start of trade negotiations – and who knows how they will go.

Back to you, Mr Rumsfeld!

 

This column was written by Robert Kent of Kentingtons financial advisers. See www.kentingtons.com

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