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Are you BREXIT-PROOF?

brexitLenAs I write this, at the beginning of September, to use Michel Barnier’s words, ‘the clock is ticking’, and there’s not much time left to negotiate the 20% of the Withdrawal Agreement that has yet to be agreed, writes Sue Fletcher.

If there is no agreement in place by March 29th 2019 – just seven months from now, then the UK will fall out of the EU. This will mean that all treaties with the EU will immediately cease; there will be no transition period to the end of 2019; there will be no agreement on citizen’s rights and we will be on our own.

So we should be asking - ‘am I Brexit-proof?’

Suddenly, No-Deal Brexit preparedness notices are springing up everywhere. The EU published this one a few months ago:

https://ec.europa.eu/info/brexit/brexit-preparedness/preparedness-notices_en

The UK is publishing its notices in batches over the autumn. The first tranche are available here:

https://www.gov.uk/government/collections/how-to-prepare-if-the-uk-leaves-the-eu-with-no-deal

If there is no Withdrawal Agreement by March 29th these notices give information on how just about every aspect of life will be affected.

Until Brexit day, Brits living in the EU27 are likely to be more affected than Brits living in the UK because we have to organise our lives very quickly.

Every one of us has our own set of circumstances and we all really need to read through the preparedness notices, determine those that apply to us, then think about how we can limit their effect.

Warning: they are a bit tedious but most don’t apply directly to us, so read through the list and extract those that do apply. Unfortunately we won’t have the full set of notices from the UK government until later in the autumn, which leaves us even less time to get our lives in order.

Below are some areas that will probably apply to us all.

RESIDENCY

In the Draft Withdrawal Agreement the UK and the EU27 committed to maintain existing residency rights for Britons and EU nationals ‘lawfully residing’ within either area. ‘Lawfully residing’ in Portugal is to have a residency permit.

As an EU citizen, this should be relatively straightforward. If you have lived in Portugal for 90 days you should apply for the five-year temporary residency, from your local Camâra. If you have had temporary residency for five years or the five years have expired, you need to consider applying for permanent residency from the Serviço de Estrangeiros e Fronteiras (SEF).

The SEF in my area (Beja) is making appointments around five months ahead, so don’t leave your decision for too long or you could find yourself a third country national before you get to your appointment.

For more details see:

https://www.algarvedailynews.com/legal/11341-are-you-legal-in-portugal-rules-on-residency-for-citizens-of-the-eu-eea-and-switzerland#comment-17022

If you have held permanent residency for over six years, you could consider opting for nationality. For details see:

https://www.algarvedailynews.com/brexit/13885-becoming-a-portuguese-citizen-update

Without a residency permit you will be treated as a third-country tourist, which means that you will require a visa to enter the Schengen area and you will only be permitted to stay in Schengen for 90 days in any 180 days.

Schengen extends from Iceland to Greece inclusive, so once your 90 days have expired you will have little option but to return to the UK or Ireland, which are not in Schengen. Visas will be one of the many thousands of topics that will need to be negotiated after Brexit day, so in the short-term, assume a visa will be required.

For greater detail see:

https://www.algarvedailynews.com/brexit/13957-holiday-home-brits-face-brexit-shambles

PASSPORTS

If you’re a British citizen, as an EU national, you’re currently able to enter the Schengen area if you have a valid passport and currently there’s no requirement for British passports to have a minimum or maximum validity period remaining when you enter or leave the Schengen area. Portugal is in the Schengen area.

If there’s no deal, after 29 March 2019, you’ll be considered a third country national under the Schengen Border Code and will therefore need to comply with different rules to enter and travel around the Schengen area. If you have Portuguese residency this will apply to you when outside of either the UK or Portugal.

According to the Schengen Border Code, third country passports must:
have been issued within the last 10 years on the date of arrival in a Schengen country, and
have at least 3 months’ validity remaining on the date of intended departure date from the Schengen area. In effect this means having 6-months validity left on your passport.

Although UK passports can be issued nine months before expiry, since 10th September this year, those extra months will no longer be taken into account.

Therefore, for existing passports you need to check the issue date, add ten years and use this date as the expiry date. To travel into Schengen means your passport should be no older than 9 years and 6 months.

If your passport does not meet these criteria, you may be denied entry to any of the Schengen area countries, and you should renew your passport before you travel.

If you apply for temporary residency the time left on your passport is taken into account, so if you only have two years left then your residency will only be for two years. As yet, we have no idea from the Portuguese government what they intend to do regarding the process of residency, although an immigration specialist lawyer considers that those already in the system will be able to continue under the same system.

Suggested action: If there is less than 9-months validity, left on your passport, counted from the issue date, then renew it before applying for residency.

DRIVING
Most of us rely on our cars. The UK driving license is currently accepted within the EU without question but after Brexit a UK license will not be recognised, so you have two options. The first is to swap to a Portuguese license, which is currently very easy and costs €30. It is also a legal requirement once you have lived here for longer than 185 days. If you delay swapping until after Brexit you risk having to pass a driving test in Portuguese. UK licence holders who do this, will be able to re-exchange for a UK licence if they return to live in the UK.

If you aren’t a resident and travel to and from the UK, or hire a car in Portugal, you will need to apply for an International Driving Permit (IDP) which is a document you carry with your driving licence. Unfortunately, this is not as straightforward as it sounds because there are different types of IDP and each is valid for a different period. Which one you need depends on which country you are driving in and each is governed by a separate United Nations convention.

The 1949 convention IDP lasts for 12 months. After 28 March 2019 in the EU, a UK issued 1949 IDP would be recognised in Ireland, Spain, Malta and Cyprus.

The 1968 convention IDP is valid for 3 years, or for however long your driving licence is valid, if that date is earlier. After 28 March 2019, a UK issued 1968 convention IDP would be recognised in all other EU countries, plus Norway and Switzerland, including Portugal. For those of you that drive across into Spain you will require both IDPs.

Currently, a UK issued IDP for Portugal isn’t available but from 1 February 2019, the government will begin providing both forms of IDP at 2,500 Post Offices across the UK. At the moment, applying for an IDP takes around 5 minutes on a turn-up-and-go basis. However, be aware that the UK only usually processes around 100,000 applications a year but after Brexit this could leap to over 5 million and there is not the staff in place to cope with this volume.

Suggested action: Put 1st February in your diary and get your IDP early and avoid the inevitable delay.

If you are living here permanently and are still driving a UK registered car, think about either buying a Portuguese registered car or matriculate the car you have, provided it is younger than July 2007. Portugal has taken this decision to achieve its climate change targets as older cars are more polluting.

https://www.algarvedailynews.com/brexit/14028-driving-into-brexit

GREEN CARDS

If the UK leaves the EU in March 2019 with no deal in place, access to the Green Card-free circulation area would cease. This would mean that UK motorists would need to carry a Green Card as proof of third party motor insurance cover when driving in the EU, EEA, Andorra, Serbia and Switzerland.

As most members of the Green Card system are also part of the EU’s Free Circulation Zone, the Green Card system has almost fallen into disuse and has barely evolved since the 1970s. Documents are still issued on green paper and cannot be delivered electronically – despite the fact that motorists are no longer even required to carry paper insurance certificates.

Returning to the Green Card system may create the following problems: 

  • A lack of clarity over when motorists need to tell their insurer they intended to travel overseas (making last minute trips more difficult)
  • Creates particular problems if someone’s insurance is due for renewal overseas – they would need to arrange for a replacement document to be sent to them (possibly from their new insurer)
  • Additional problems if any driver loses or misplaces their Green Card documents while outside the UK – they would need to arrange for a replacement document to be sent to them.

TRAVEL TO THE EEA

Even in a no deal scenario, all UK motor insurance providers will continue to be required to provide third party motor insurance cover for travel to EEA countries in a UK registered vehicle, but please check your level of cover with your insurance company when you apply for your Green Card.

Without a Green Card, you would have to purchase local insurance in the country you are entering (also known as frontier insurance). This provides proof of third party motor insurance cover for a UK-registered vehicle in that country for a limited period of time (the period of validity varies depending on policy purchased). However, due to high costs and limited availability of frontier insurance across these countries, the UK government recommends that you obtain and carry a Green Card to ensure minimum requirements for motor insurance cover are met.

You can request a Green Card from your insurance provider free of charge, but insurers may decide to reflect production and handling costs in a small increase to their administration fees.

If you have 2 insurance policies covering the duration of your trip (because the policy renews whilst you are away), you must ensure you have the correct documentation (1 or 2 Green Cards may be required).

Please note that you do not need to request a Green Card yet, so speak to your current insurance provider for advice and, if your provider insures many UK cars already outside of the UK, do this earlier rather than later to avoid the inevitable backlog. If your trip into Schengen/EU straddles the Brexit period, you will need to speak to your insurer well beforehand to ensure having the correct paperwork for your post-Brexit travels.

You should expect documentation checks to be carried out when entering these countries (the Schengen Area border), or when randomly stopped.

PETS

If you travel to and from the UK regularly with your pet and it has a UK pet passport, it might be worth considering talking to your Portuguese vet to see if you can get a Portuguese pet passport for it, effectively giving the animal dual nationality. It will have to be chipped and vaccinated but it might save a lot of future hassle. The UK has said that the old quarantine system won’t return, but as the pet passport is essentially an EU initiative, in theory the UK will drop out of the system after Brexit.

Suggested action: discuss with your local vet.

WILLS & POAs

Under the EU regulation that has been in force since 17 August 2015 (‘Brussels IV’), that allows an individual to use the succession laws of his country of nationality to apply on his death, many Brits rely on their UK Will. This is another area that’s unclear at Brexit, so check out the validity of the Will you currently have and any Powers of Attorney.

From personal experience, a POA is as important, if not more important, than a Will because if a member of your family becomes mentally incapable and needs, say, nursing home care, you need to be able to access their bank account to pay for it, and maybe sell the home or other possessions. Without a POA, you will not be able to do any of those things and then life gets very complicated and potentially financially catastrophic.

Action: take legal advice.

TAXATION

Each country sets their own tax rules and how they use them depends on whether you are a resident, not your nationality. Brexit may cause some current rules to be applied differently as you move from being an EU citizen to being a third country citizen.

For example, if you sell a Portuguese home to reinvest in a new home back in the UK, you currently qualify for capital gains tax relief. Once the UK is a third country, the sale could attract capital gains taxes.

Another issue comes from the UK government as it loses its EU commitments and gains more freedom to tax UK nationals living in Europe - pensions could be a target.

Another change could be tax relief rules for expats. For example, the government has threatened to remove the personal income tax allowance from non-resident British nationals, which could prove be a relatively easy way for the Treasury to raise revenue in the future.

With only seven months of certainty left, it might be a wise move to talk to a financial expert in this field.

As a Brit after Brexit, with a holiday home but no residency certificate, by law it is necessary to hire, a ‘Fiscal Representative’ to take charge of paying all taxes due in your absence. There are changes in the pipeline that aim at electronic reporting, but as yet, they are not in force.

As with all things Brexit, it is difficult to be more specific at this stage, but if you renew your residency then this won’t be applicable to you.

IMPORTING GOODS FROM THE UK

Do you routinely buy things from the UK? Currently, it’s easy and cheap but after Brexit, particularly on third country status WTO rules and no EU custom’s union, things are set to get very much more expensive. It might be worth thinking about everything you buy from the UK and if it keeps, and you have the money, do a bit of stockpiling of your own. It will probably be a better investment than money in the bank.

Below is a link to the Irish customs website, which gives a very clear explanation of the costs involved for a variety of scenarios when buying from a third-country. Bear in mind that many companies will charge a VAT-inclusive price online and will not bother or have the means to deduct the VAT, so you are likely to end up paying VAT twice.

https://www.revenue.ie/en/importing-vehicles-duty-free-allowances/buying-of-goods-online-for-personal-use/buying-goods-from-outside-the-eu.aspx

Suggested action: stockpile, just like the UK government allegedly is doing.

PENSIONS and INSURANCES

The current situation with negotiations is that state pensions will continue as they are and can be paid into an EU bank account but any insurance-based pension (e.g. an annuity) or occupational pension is a potential problem due to ‘passporting rights’. This also applies to any UK insurance you might have – health, life, car etc. No payments will be able to be made directly into EU bank accounts without these Passporting Rights.

Suggested action: check with your insurance company or pension provider and ask how they intend solving any issues.

UK BANK ACCOUNTS

UK bank accounts will not be accessible directly from the EU for the same reason as above, i.e. passporting rights.

Suggested action: contact your UK bank for a solution.

A warning though; if you live in the EU27 permanently and cannot supply a UK residential address, you may be asked to close your UK bank account. Using cashpoint cards here to withdraw money from the UK is not likely to be an option for the same reason, as the bank on this side of the Channel will not be able to get the money from the bank in the UK. Using debit and credit cards to purchase goods is likely to become more expensive and if your permanent address is in one of the EU27 countries, the card may be withdrawn. Barclaycard already has withdrawn its cards from anyone living permanently in Portugal, but it claims this is not due to Brexit.

QUALIFICATIONS

If you rely on your UK qualifications to work, it is worth checking that you will be able to continue after Brexit. The EU Preparedness notice on this indicates that qualifications in use up to the point of Brexit will continue to be recognised.

Suggested action: register your qualifications and keep any written evidence that can be used as proof in the future that you were indeed using the qualification here before Brexit.

HEALTHCARE

Once you have your temporary residency you can register with the Portuguese health service (SNS) and get a Cartão de Utente and with this you will be treated as if you were Portuguese. If you are a UK state pensioner you should have an S1 form registered with social security. This entitles you to be treated on the local SNS at the expense of the UK NHS.

This S1 scheme may or may not survive Brexit, but as it’s free it makes no sense not to be part of it. If you don’t already have an S1 form then contact the UK’s overseas pension service to request one. You will receive two identical copies which you need to take to your local social security office. They will retain both and about a week later you’ll receive confirmation in the post. Retain this for use should you need to use the local SNS.

The above is by no means exhaustive and the situation is currently very fluid. However, it makes sense to sort out what you can while you can and while it is easy. If there is a Withdrawal Agreement and we do have a 19 month transition period, everything should become more manageable, but it might still be worth asking the questions.

I very recently asked the following question of the British Embassy:

One thing we all really need to know re Brexit is, in the event of no agreement on the Withdrawal Agreement, when will the Portuguese government consider us as third country nationals, particularly for obtaining permanent residency - on March 30th? Also, will those with Temporary Residency be allowed to carry onto Permanent Residency as EU citizens rather than third country nationals who must pass the language test?

Here is the reply:

Regarding the questions you put in your last email, what we can say right now is that the Embassy is in discussion with the Portuguese Government about the implementation of the Citizens’ Rights deal, and any planning for a ‘no deal’ scenario. The Portuguese Government have made it clear, at highest level, that they value the British community.

We will ensure all relevant information is available to UK nationals in Portugal in the most transparent and accessible way possible, as soon as we are able.

You will have seen that the UK government published a first batch of technical notices last Thursday, aimed at providing information to businesses and citizens in the event of an unlikely ‘no deal’ scenario.  However, let me assure you that the publication of these notices does not mean the possibility of a no deal scenario is any more likely.  In fact, given the progress made in negotiations to date, the UK government is confident it will secure a deal with the EU.  But it is important that, as a responsible government, they should prepare for all possible outcomes.

I recognise this remains an uncertain time, and everyone is anxious for as much information as possible, so we will continue to post updates on our Facebook pages, and I am sure you already know that you can sign up to receive automatic updates from GOV.UK  here.

_________

As a thousand heads are better than one, if any reader has found a Brexit related problem and maybe even a solution, please email the author, Sue Fletcher at

brexit@algarvedailynews.com

to share your experiences and, with your permission, include them in this article.

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