The Brexit factor: what the vote means for holiday homes − Jonathan Riley is featured by The Times
As the Brexit debate heats up immigration is dominating conversation. But for more than one million Britons who own a holiday home in the EU – and those who would like to – the burning question is what a vote to leave on June 23 would mean.
In The Times' article a number of industry experts answered questions put to them by readers. Jonathan Riley, Partner and Head of Michelmores' Private Wealth team, offered advice on the subject of tax.
Will I have to pay more tax?
"Brexit throws up a host of uncertainties for property owners in the EU – both during their lifetime and following their death. Taxation is currently within the gift of member states. However, in any event, it is subject to EU treaty principles aimed at avoiding discrimination across member states – something which is likely to end following a Brexit."
"Currently countries such as France have a track record of imposing a different tax burden on non-EU property owners and in theory could do the same for British owners of a French holiday home. Double tax treaties which avoid a receipt (for example property rental income) from being taxed twice are between the UK and individual countries. As a resuly the impact of Brexit may not be as significant as some might imagine. An assessment will need to be made of the tax rules that apply to the individual and the property's jurisdictions as these are likely to differ in each case."
"EU banks typically view a non EU resident less favourably, resulting in higher deposit requirements and less favourable terms. From August last year the Brussels IV convention has enabled EU residents to specify which law should determine who inherits EU property on the owner's death. A Brexit would take us back to the position where different local laws determine succession to EU real estate depending on the jurisdiction in question; property owners will therefore need to consider this aspect again."
"Any tax cost may be against the back-drop of weakened Sterling, which of course would make acquisition of EU property more expensive to start with."
"British expats constitute a significant presence in the EU and it would seem counterproductive not to manage many of these implications as part of any exit negotiations. Uncertainty will continue from now until sometime after a vote – this is perhaps the only certainty that British EU property owners have."