This morning it was announced that a majority of the British electorate voted to leave the European Union in yesterday’s referendum. The formal procedure for leaving the EU is likely to begin in around 3 months and once a new Prime Minister has been appointed after David Cameron’s resignation earlier today.
The only procedure available for exiting the EU is that provided in article 50 of the Treaty of the European Union. This requires the negotiation of a withdrawal agreement with the withdrawing state by the Council acting by a qualified majority and with the consent of the European Parliament. The withdrawal agreement is to regulate the future relationship of the withdrawing state with the EU. Estimates given for the period of negotiation have been from 4 to 9 years. Article 50(3) prescribes that the EU Treaty shall cease to apply to the UK from the date of entry into force of the withdrawal agreement or, failing that, two years from notification of withdrawal unless extended by agreement. Accordingly, treaty rights will likely continue to apply for a minimum period of 2 years from notification of withdrawal, which the Prime Minister has said today will not occur for 3 months.
Please contact us if you would like to discuss further the legal implications of “Brexit” on your tax affairs.
This article appears in the JHA June 2016 Tax Newsletter, which also features:
