The UK-EU trade agreement

By Manuela Robinson, in Personal Finance, News · 22-01-2021 01:00:00 · 0 Comments

Well, we made it into 2021 – it’s been quite a ride, but here we are. I’d like to begin by wishing all my readers and clients a very happy and prosperous New Year. And as the temperature plummets, what rays of sunshine can we see for the coming year that can give us cheer until the warmer weather arrives?

How about the recently agreed EU-UK Trade Deal – surely there must be some good news to be found in amongst those 1,246 pages? I can’t pretend to have read them all, but here’s a look at some of the key things covered and what they mean for us.

The end of free movement
Free movement between the UK and the EU no longer exists. This, of course, doesn’t mean we won’t be able to travel between territories, it just means there will be certain restrictions. You will need at least six months left on your passport for one thing, so best to get your passport renewals done in good time if you’re planning anything this year (COVID permitting).

If you intend to stay more than 90 days in any 180-day period, you will now need to obtain a visa – details of these are likely to vary between EU member states, so it’s best to check these individually. Likewise, the automatic right to live and work in the EU for UK citizens is no more, nor that of EU citizens wanting to move to the UK. But again, VISAs are available (for a fee!) and the UK will still want to entice highly skilled workers from abroad to come and fill their shortfalls. Whether or not the UK will still hold the same allure for Europeans is yet to be seen.

Trade
Under the terms of the deal, it has been agreed that there will be no taxes on goods traded between the UK and EU, nor will there be a limit to the amount of goods traded. This is great news of course, and should allay fears that prices in the shops could rise after Brexit. We are seeing teething problems however, as increased paperwork and general confusion at ports leads to longer delays for truckers bringing goods to and from the UK. Hopefully this should smooth out in time.

Services

It is now more difficult for services based in one country to operate across borders and gain access to markets in Europe. Regarding financial services; where previously a UK based advisor may have had access to clients in the EU through a concept known as passporting, that will no longer be the case. This makes taking financial advice from someone in your country of residence all the more important.

If you have pensions or investments that are based in sterling in the UK, and you are unsure what is the best way to proceed with these – now could be a good time to take advice from an EU based advisor. Alternatively, you may have lost access to banking services if you don’t have a UK address. Anyone intending to move some or all of their wealth as a result of this, should probably take advice on financial products in your country of residence. This will help you minimise your exposure to tax.

Healthcare
If you currently have a European Health Insurance Card (EHIC), this will remain valid until its expiry date. The UK government says that this will be replaced in due time with a new Global Health Insurance Card (GHIC); This will be valid in EU countries, but not in Norway, Iceland, Liechtenstein or Switzerland. It’s interesting to note however, that the UK still advises travellers to get travel insurance with health cover.

Erasmus
Unfortunately, the UK (with the exception of Northern Ireland) will no longer participate in the long-standing EU Erasmus programme, that allows EU students to study in other European countries. The UK are proposing to start a similar scheme in September 2021 which will encompass countries from across the globe, and will be named after the mathematician Alan Turing.

There’s a lot more to the deal than the points mentioned above of course, and I have cherry picked those I thought most important to people living between the UK and Europe. Visitors from the UK will still flock to our golden shores I’m sure, and they can rest assured that Portugal will welcome them like old friends.

Blacktower Financial Management has been providing expert, localised, wealth management advice in Portugal for the last 20 years. We can help with specialist, independent advice on securing your financial future. Get in touch with us on +351 289 355 685 or email us at info@blacktowerfm.com.




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