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Inheritance, Personal Taxation and Non Doms

19 July 2016

In general, the EU has taken limited action in relation to inheritance and personal taxation.  These areas are largely controlled and regulated by the Government of each respective member state.  For this reason, there are likely to be few legal implications as a result of Brexit.  That said, the following points should be noted.



The EU recently attempted to regularise succession throughout member states by implementing the EU Succession Regulation (“Regulation”).  The UK had already opted out of the Regulation some years before Brexit.  The Government felt that it may have had a detrimental impact on lifetime gifts and land registration.

However, whilst the UK is not a signatory to the Regulation, it is a beneficiary of it.  It permits UK nationals who own property in the EU to specify that they wish English law to apply to succession.  This allows property owners to avoid the fixed heirship rules imposed by a number of member states.  Once the UK has left the EU, this position remains uncertain.


Personal Tax

Direct taxes such as income tax and capital gains tax are governed by UK law with little interference from the EU.  As such, leaving the EU should not of itself have a direct impact on these taxes.  The UK Government will continue to set the rates of tax as before.

However, tax rates may have to rise if the UK economy suffers as a result of Brexit.  Before the referendum, the Government suggested that income tax and inheritance tax would be likely targets for tax rises.  There has also been a suggestion of an Emergency Budget although this has not been confirmed

A Brexit may lead to the removal of various tax reliefs and exemptions that currently exist because of the UK’s membership of the EU.  Two examples are the availability of agricultural property relief in relation to farmland situated in other EU countries and the tax exemption for gifts to charities located in other EU member states.

Considerations for non-doms

The UK’s tax system has been shaped by a requirement not to discriminate against those resident in other EU member states.  It is possible that those protections may now be lost resulting in individuals or entities, resident in other member states, who hold assets, or invest in the UK, being taxed more harshly in future.

Moreover, in some cases, a non-EU resident will pay higher taxes on income arising in the EU, compared with EU residents. This could now impact UK individual’s working in the EU.  However, most countries base their taxation systems on residence, rather than citizenship.  The UK also has a number of tax treaties with both EU and non-EU countries that allow taxes to be offset, avoiding double taxation.


It is difficult to accurately assess the impact Brexit will have on inheritance and personal taxation until we have a clear understanding of what the UK’s relationship with the EU will look like.  That said, most UK individuals can rest assured that Brexit is unlikely to result in substantial changes to succession and personal taxation, particularly for those that do not own property outside of the UK.


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