The Tax Consequences Of Brexit

The political, economic and constitutional fallout of the U.K.’s referendum decision to leave the European Union (Brexit) will continue for some time. In addition to considering some of the possible domestic U.K. tax implications of Brexit, this article 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 U.K. negotiates with the EU in the coming months and years, and the future domestic tax policy adopted by the U.K. 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 U.K. market and on U.K. 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 that rely on the U.K. 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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