Impacts of Brexit on Trusts and Tax Policies
Three years after haggling in the British Parliament, upheavals at the top of the government, and blaming Brussels to delay its exit, Britain concludes the chapter on approximately half a century of close ties with Europe at 11 p.m. Greenwich Mean Time, Jan. 31, 2020. While the U.K. has officially exited the European Union, it is now in the transformation period of creating a new relationship with the EU. During the transition period, it doesn’t have an EU policy, but will still abide by EU Rules.
The United Kingdom is negotiating all the financial relationship, tradition, taxation rules, private trust company agreement, trust registration services, and all with the EU. it is not good to witness a host of rule changes and tariffs as it falls out of the EU single market.
Let’s throw lights on the impacts of a UK exit from the European Union
Brexit’s Effect On Trusts
Despite the fact that Brexit has not made any changes to private client work in any way, it is supposed to have a knock-on effect on Brexit. It is focused on the limelight on how English trusts work for clients. New money laundering directives are supposed to contract rules around the transparency of trust ownership by putting more of them on a central register. Any trust whether or not it has consequences needs to report to the Revenue and there must be a register that is available to interested parties. Before Brexit, all express trusts administered in the United Kingdom would have to be registered with HMRC, even those that have no current tax consequences. After Brexit, this includes all jointly-owned land in England and Wales, all pension policies, and life policies held in trust. There are millions of these to be registered.
Brexit Impacts on Tax Policy
- Sales of Goods – Acquisition or sales of goods are considered exports or imports after Brexit. When it comes to imports, the base of VAT has increased with the corresponding customs duties, purchase commissions, transport, and special taxes. Exports are exempt. When custom operations (imports or exports) are talked about, they need to have an EORI number. These operations are being applied to para-customers and customs controls. These are prone to all restrictions and prohibitions on imports and exports from non-EU countries.
- Trilateral Operations – No place for trilateral operations involving the UK.
- VAT Return – The VAT return scheme has been applied to British passengers for purchases in the EU and purchases made by British travelers in duty-free ports and airport terminals are free for VAT purposes.
- Identification and Resident Tax – It is essential to distinguish the recipient, location, and nature of the service provided. Also, when a company is willing to register for VAT in a Member State, appointing a resident tax representative is a must.
- Refund of Input VAT in Spain – As a company owner in the UK, you can apply for a refund of input VAT in Spain through the refund procedure for non-established companies. For this, you will need to appoint a tax representative in Spain, provided that Spanish companies will be considered to treat in the same way.
After staring at and looking at several reports and analyses, there is no doubt that a Brexit will bring with it large economic and political costs as well as certain changes in private trust companies and trusts.