Brexit – The UK and International Tax Consequences

June 30, 2016

The political, economic and constitutional fallout of the UK’s referendum decision to leave the European Union (Brexit) will continue for some time. In addition to considering some of the possible domestic UK tax implications of Brexit, this OnPoint also considers some of the potential tax implications from the perspective of the U.S. and certain European jurisdictions. Since much will depend on the relationship the UK negotiates with the EU in the coming months and years, and the future domestic tax policy adopted by the UK government, what follows should serve only as an illustration of possible future changes. Taxpayers should closely monitor developments in this area.

Much commentary has focused on the consequences of Brexit on the UK market and on UK taxation. However, there will undoubtedly also be material tax implications for taxpayers in other jurisdictions. In short, any exemptions from tax in other EU member states or treaty jurisdictions which rely on the UK being a member of the EU are likely to be affected. Set out below are some initial thoughts as to potential international tax issues to bear in mind.

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