Update: June 2019, ‘No deal’ Brexit still looks unlikely

Jeremy Hunt and Boris Johnson are slugging it out to become Prime Minister (Twocoms / Shutterstock.com)

Jeremy Hunt and Boris Johnson are slugging it out to become Prime Minister (Twocoms / Shutterstock.com)

The Conservative leadership race has narrowed to Boris Johnson and Jeremy Hunt, with the former currently the favourite to win the Conservative Party members’ ballot. This will be announced soon after 22 July. With both candidates generally considered to be on the centre of the party politically, the main bone of contention is who would be likely to get a result – any kind of result – on Brexit.

Both have said they would be willing to take the UK out of Europe with no deal. Boris Johnson said the UK would leave on 31 October “come what may, do or die”. However, he later declared that the chances of Britain leaving the European Union without a deal are “a million-to-one”.

Johnson has said he believes it is ‘perfectly feasible’ to renegotiate the Withdrawal Agreement with the European Union. That remains to be seen, but there is certainly an attempt at moving forward on some of the thornier issues surrounding the negotiations. The Alternative Arrangements Commission, a thinktank with the backing of a number of Conservative MPs, has published recommendations for avoiding the Irish backstop which, it claims, could be implemented within three years.

For his part, Jeremy Hunt has said that as a skilled entrepreneur and negotiator, who has managed to retain some respect among the EU27 leaders (unlike his opponent), he would have a better chance of getting the original Withdrawal Agreement changed by the EU, and then through the House of Commons.

Looking at the arithmetic of the Commons, there is also the possibilty that sufficient rebel Labour MPs will vote for the deal, rather than risk no deal or no Brexit. It also seems likely that various devices wil be adopted by the opposition parties and rebel Conservative MPs to block a no deal Brexit.

Which all leave us…

Assuming the above is true, we might be able to draw several conclusions.

No deal is still an unlikely outcome. However, even if that does happen, do overseas buyers really need to worry? The simple answer is no. We’ve explained before how you can move to Italy even in the event of a no-deal, but that actually looks more unlikely than the media would have you believe. It looks improbable that any Prime Minister could command a majority in the House to back a no-deal if it came to it.

If a deal or extension is cobbled together, the original implementation period allowed two years for those within the countries to sort out their affairs. It also allowed British people two years to move to the EU27 with all their EU rights. Clearly this cannot be guaranteed, but seems more likely than not.

Update: April 2019, Extension to 31 October offers breathing space

What does the 31 October deadline mean?

The other 27 nations of the EU have granted the UK a “flexible extension” to its membership of the EU until the 31 October. This means that if Theresa May gets her Withdrawal Agreement passed before then the UK will leave the EU earlier.

Both the Prime Minister and the EU seem to hope that it can be passed in time that the UK will not have to take part in the European elections on 22 May.

At the same time, the Government has, according to reports, now abandoned its No Deal planning as it believes that we will never leave the EU without a deal.

From the EU’s side, Jean-Claude Juncker said the EU was ready for No Deal. “We have adopted the necessary contingency measures and we are ready for a no-deal Brexit,” he told MEPs. However, since it is generally agreed in the UK parliament that this is the last option, we ca probably discount it for now.

Next stage of the process

There will be further talks between the government and Labour Party as soon as parliament returns from the Easter recess. If a compromise deal can be reached, MPs will vote on it. If passed, the UK will negotiate the amended deal with the EU and aim to leave as soon as possible. If MPs reject a deal worked out between Labour and the Government, the next stage is unclear.

If the talks break down, MPs will vote on another set of indicative votes before having to contest the elections. If a deal can be cobbled together we are once again set to leave. If not, we will either leave on 1 June without a deal, or we will take part in the European elections.

If we take part in the European elections, we are back to six main options:

  1. Passing Theresa May’s Withdrawal Agreement
  2. A full renegotiation of Brexit
  3. Another referendum
  4. Cancelling Brexit
  5. A General Election
  6. Leaving with no deal
  7. A combination of the above, such as the Withdrawal Agreement plus a comfirmatory referendum

What this means for property buyers

Holiday home-owners

For holiday home-buyers, whatever happens with Brexit their right to buy in Italy and spend a large proportion of the year there will be unaffected. Why? Because property ownership is not one of the “four freedoms” of the single market and anyone – even Americans, Australians etc – can buy.

Moreover, those “third country nationals” (as Americans, Australians etc are classified, and the British probably will be too) will be able to travel visa free to their property probably for up to six months of the year. They will probably have to take out private health insurance, however, just as they do now in fact, and may not be allowed to work.

Retirees and relocators

There is possibility that “freedom of movement “ doesn’t end, either through Brexit being cancelled via a second referendum or by a softer version of Brexit. In which we will continue to be able to relocate to EU countries just as now.

Perhaps more likely, given that both the Government and Labour have committed to Brexit and ending freedom of movement, is that restrictions are put in place under some version of Brexit. That may mean British people can retire to the EU but not work. That’s the situation with other third country nationals such as from America and Australia.

Transition period

Had Theresa May’s deal passed, under the transition period, British people would have had until December 2020 – almost two years after Brexit – to establish residency in EU countries and retain all their EU rights. For life. And not just for them, but for their spouse and dependent family too.

The transition period will be implemented under any version of the deal – and presumably may be extended if we leave on 31 October beyond its original December 2020 date. So if you are planning to move to an EU country and wish to retain our right to free healthcare, to work, study and live just an any other EU citizen, you should have another 20 months at least to do so.

Update: June 2018, Government offers detail on citizens’ rights

  • Home Secretary urges EU to speed up plans for UK expats in Member States
  • UK government publishes plans and demands EU does same
  • If you have previously lived abroad but returned to UK, you could retain rights
  • UK government says it wants to secure reciprocal rights even if you move after Brexit.
  • Even in the event of no final deal bring agreed, UK will follow through on citizens rights.
  • No agreement on “onward movement” within EU.

 UK announces residency plans, awaits EU response

Under plans from the UK government announced this week, the process by which EU citizens in the UK can apply to continue living here will amount to proving three simple questions: who are you, where do you live, do you have any (serious) criminal convictions. Moreover, they will be able to answer the questions via a mobile app or online, for example by taking a photo of their address. The authorities will then check this against existing databases.

The question is, will EU nations where the British live adopt similar rules and procedures?

The cost for their “settled status” application will be £65 or adults and £32.50 for children. EU citizens in the UK will be able to apply via the system from “the start of next year” up until at least June 2021, said the Home Secretary. The question is, will EU nations where the British live adopt similar rules and procedures?

The UK has been putting pressure on the EU to provide information on its planned procedures for UK nationals resident in the EU to secure their on-going residency status after Brexit. According to Home Secretary Sajid Javid, the European parliament’s Brexit co-ordinator, Guy Verhofstadt, has accepted that the EU’s 27 member states need to do more to reassure expat Britons in the EU about what to expect post-Brexit.

Reciprocal healthcare

A Government statement on Brexit also released this month should reassure expat pensioners concerned about their healthcare rights after Brexit. The government, highlighting how citizens’ rights to reciprocal healthcare remains a primary condition in any deal with Brussels.

Responding to recommendations raised by the House of Lords, the Government stated: “It has been clear that safeguarding the rights of EU citizens living in the UK and UK nationals living in the EU is a top priority. Through negotiations we have reached a fair agreement on citizens’ rights, grounded in reciprocity, which seeks to allow citizens to continue living their lives broadly as they do now.”

Indications are that both parties have found common ground on the issue of healthcare. “We have reached a reciprocal agreement in principle on healthcare arrangements to those UK and EU citizens who move countries during the implementation period,” continued the Government’s statement. “This was reflected in the updated draft Withdrawal Agreement text presented at the March European Council.”

Return to the Continent

The Government’s draft deal would accommodate Britons who have at some point lived in another EU country before the implementation period ends on 31 December 2020. “For example, a UK national who has worked for a year in Spain, but has returned to live in the UK prior to the end of the implementation period and retires to France upon reaching state pension age, could be covered for reciprocal healthcare in France when they export their state pension,” said the statement. “This would also include a UK national who is exporting a UK state pension to Spain at the end of the implementation period.”

No deal, no problem

Under the principle that “nothing is agreed until everything is agreed”, could all the rights and procedures agreed so far be abandoned? This was the question put by a House of Lords committee last week. In response the UK said this was unlikely: “providing certainty for citizens was a priority and we believe it would be unlikely for any deal on citizens’ rights agreed early on to be reopened.”

No onward movement agreement

Many British people already living in the EU, or about to move, have expressed concern that their rights are only based on the country where they reside. For example, a UK citizen resident in France will have no right to move to Spain, under current plans. The government could offer no help here, however, saying: “We understand that onward movement is an important issue for many UK nationals living in the EU, and the UK pushed strongly for this to be included during the first phase of negotiations. However, the EU made clear that it was not ready to include it in the Withdrawal Agreement.”

Healthcare for those who move after Brexit?

The UK government has acknowledged the fears of those who will not live in the EU before Brexit, and those who simply go on holiday, that the EHIC system will end. “We understand the importance of maintaining reciprocal healthcare arrangements for needs-arising treatment for those with chronic conditions, disabilities or other long-term conditions that require ongoing medical attention. This is why we have been clear that we want to continue with the EHIC scheme in any future agreement.”

However, they say this is a subject beyond the scope of the current talks and will be debated in the next phase of negotiations. The government has noted, however, that the UK does have arrangements with other non-EU countries, such as Australia and New Zealand. While these are generally only related to emergency healthcare, rather than the long-term conditions that many UK retirees in the EU suffer, the government says: “This demonstrates that reciprocal healthcare agreements are not dependent upon EU free movement rules.”

UPDATE: 19th March 2018. Transition deal agreed.

The British and EU negotiating teams announced on 19th March 2018 that the UK’s transition period with the EU post-Brexit will continue to 31st December 2020. This extends by 21 months the period during which UK citizens can move to Italy and claim the same rights as before Brexit (see below). When you have become legally resident, which is a simple procedure (see below), you will retain your right to reside, work, study or open a business in Italy. You will also retain your rights to subsidised healthcare and a state pension.

The deal announced by the UK’s lead negotiator David Davis and the EU’s Michel Barnier means you should have longer than you first thought to move to Italy and receive the same EU rights as British expats who relocated pre-Brexit. We say “should” because as Mr Barnier said: “Nothing is agreed until everything is agreed.”

Michel Barnier (right) and David Davis. (Alexandros Michailidis / Shutterstock.com)

The deal could still unravel, but this seems highly unlikely. You can plan your new life in Italy with some confidence. After the official Brexit day on 29th March 2019, the UK will enter an ‘implementation phase’. This will last until 31st December 2020.

The transition phase will give you extra time to sort out your affairs, apply for Italian residency and find somewhere to live. There is no need for the panic that the March 2019 deadline had been creating for many of our readers.

It is especially good news for British people retiring to Italy in the next three years. If you retire in the UK you get a UK pension that you can transfer to Italy. It should be increased each year just like in the UK, according to the “triple lock”, in line with inflation, average earnings or 2.5%, whichever is greater. It also means that those with more complex and expensive health needs can move to Italy until 31st December 2020 knowing that their right to state healthcare benefits in Italy will continue for tier lifetime.

UPDATE: 1 February 2018. Transition deal will not include right to move

The Prime Minister Theresa May has refused to allow the transition period to include the right to free movement of EU citizens to the UK. If reciprocated, it means that you have until 29th March 2019 to move to Italy.

Many people thinking of moving to Italy will be worried that they will face restrictions after Britain leaves the EU. In our most recent survey four out of every ten of our readers were worried by Brexit.

The news in December 2017 that an initial agreement had been reached not only sent the pound shooting up in value, but was a welcome Christmas present to the British people hoping for a long, affordable and relaxed life in Italy. It spelled out the rights of people moving to Italy until March 2019: “There will be no change to the rights and status of UK nationals living in the EU while the UK remains in the EU.”

It was also widely assumed that this would be extended until December 2020 as part of the “status quo” transition period. However last week Theresa May said, “I’m clear there is a difference between those who came prior to us leaving and those who will come when they know the UK is leaving.”

Theresa May made the comments while in China

This caused immediate outrage. Guy Verhofstadt, the European parliament’s Brexit coordinator, said: “Citizens’ rights during the transition is not negotiable. We will not accept that there are two sets of rights for EU citizens. For the transition to work, it must mean a continuation of the existing freedom with no exceptions.”

However, for British people wanting to move to Italy, the message is clear that only by living in Italy before 29th March 2019, when the UK leaves the European Union, will your right to live in Italy be guaranteed.

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The agreement in December essentially says the following:

• UK nationals who are lawfully residing in Italy by 29th March 2019, will be able to continue to reside in Italy.
• That includes children born or adopted outside Italy after the 29th March 2019.
• Close family members (spouses, civil partners and unmarried partners, dependent children and grandchildren and dependent parents and grandparents) will be able to join you in Italy after exit under these rules, so long as the relationship existed on 29th March 2019 and continues to exist when they join you in Italy.
• You and your family members can leave Italy for up to five years without losing your right to return.
• You and your family will continue to have the same access as you currently do to healthcare, pensions and other benefits.

Although this seems straightforward, the key phrase is “lawfully residing”. What do you need to do to be lawfully residing?

We spoke to Giandomenico de Tullio of De Tullio Law Firm in Italy who told us “In order to be lawfully resident in Italy a British buyer needs a certificate of residency (certificato di residenza) which is issued by the Municipality where he or she resides.”

To get your certificate of residency you simply pop down to your local town hall (commune – ufficio anagrafe) with:
– Your passport.
– Documents supporting your application such as a bank statement showing you have sufficient funds to support yourself.
– Evidence of a place of residence.
– A health insurance policy for a minimum of one year.
The council staff should help you with filling out forms, photocopying supporting documents and providing a revenue stamp. The police will also call round to your residence to confirm you live there.
Will this be enough to prove you are resident in Italy? According to the law, yes, but many people who have been living in Italy for years are applying for permanent residency, which you can apply for after living there for five years. At that point, all the restrictions on living in Italy and free movement within the 27 EU nations should fall away.

From a fiscal point of view, you are automatically considered Italian tax resident if your main home is in Italy. You would also be considered resident if you spend 183 days in Italy in any calendar year, or if your principal occupation is in Italy, or if Italy is the country of your most substantial assets.”

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The December agreement also laid out general agreements on the procedures for proving residency for those living in Italy before March 2019: “EU27 Member States may require UK nationals and their family members covered by the agreement to apply to obtain a status conferring the right of residence and/or obtain a residency document. Administrative procedures for applications for status will be transparent, smooth and streamlined. Where an application is required to obtain status, UK nationals will have at least two years to submit their applications. Residence documents will be issued free of charge or for a charge not exceeding that imposed on nationals for the issuing of similar documents. Further information on these administrative procedures will be provided when available.”

Family purchase could open the door

The right to bring family to Italy is extended to dependent children and grandchildren of the legal resident. This opens up another angle for British people who wish to retain their EU rights but are not in a position to move to Italy yet.

Although only one person needs to become legally resident in Italy for the whole family to benefit, the cost of buying the home can be spread among many. Read our brand new guide, Buying Abroad with Family to see how to organise the legal and financial aspects.

If you cannot buy before March 2019

For those who cannot establish legal residency in Italy before Britain leaves the EU, whether that includes the transition period or not, the “worst case scenario” remains as outlined in our guide “How to Live in Italy After Brexit”. Very roughly, these are rules that apply to Americans. Australians etc. It seems highly likely that a bespoke visa system would apply to the British, who arrive in Italy by the millions every year, but if not then these are the rules that could apply:

• Non-EU passport holders can stay in Italy for up to 90 days without getting a visa. This can be spread over as many visits as you like, allowing for at least 12 weeks in the country spread throughout the year.
• The “long stay visitor visa” allows you to stay for up to 12 months, without the need to obtain a residence permit. You must prove that you have enough money or income to support yourself without working.
• There is no restriction on you buying a home in Italy and there are no limits on where.
• Non EU buyers are generally able to get the same deal on mortgages as EU citizens.
• If you wish to rent out your home you will need local authority permission and you will have to declare any rental income in Italy.

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