On 12 July 2018, the UK Government published its long-awaited White Paper on "The Future Relationship between the United Kingdom and the European Union", and a week later another White Paper on "Legislating for the Withdrawal Agreement between the United Kingdom and the European Union". The first paper is intended as a blueprint for further negotiations with Brussels; the second paper sets out how the Government plans to implement the draft Withdrawal Agreement, which is currently being negotiated between the UK and the EU, into domestic law. For more information on both papers visit our Brexit Hub.

We have come a long way since we last published a Brexit update on personal taxation; and, although neither White Paper addresses the matter in any substance, it is possible to piece together the proposed direction of travel (though the reception the future relationship White Paper has received _ both domestically and in the EU _ suggests that any final deal will almost certainly look different) and identify some of the key points for post-Brexit personal taxation.

Tax status and a new "framework of mobility"

Personal taxation in the UK is linked to where a person lives and works. For the immediate future after EU withdrawal, the UK and the EU have already reached an in-principle agreement on citizens' rights to provide certainty for EU citizens living in the UK, and UK citizens living in the EU, before and until the end of the expected transition or implementation period (31 December 2020). This agreement would see individuals and their family members able to move, live and work on the same basis as they can now up to 31 December 2020, but thereafter (and subject to any further agreement) free movement into and from the UK will end.

The White Paper on the future relationship proposes a new 'framework of mobility' after Brexit to facilitate movement of people between the UK and the EU. However, the proposal only applies to a defined number of areas, such as visa-free travel for tourism and temporary business activity and facilitated mobility for students and young people. For a detailed account on the White Paper's "framework of mobility", visit our Brexit Hub.

Even if the UK and the EU can agree that framework, Brexit will still affect individuals' decisions to move permanently. These decisions will affect a person's domicile status and, consequently, their personal taxation position.

The post-Brexit future of inheritance tax

There are currently reliefs from inheritance tax designed to ensure compatibility with EU rules on free movement. For example, relief from inheritance tax on the value of agricultural property currently extends beyond property situated in the UK (plus the Channel Islands and the Isle of Man) to include property situated anywhere in the European Economic Area. Such reliefs may be removed post-Brexit as no longer required.


It may go without saying that the draft Withdrawal Agreement is indeed still a draft and the provisions "agreed at negotiators' level" will depend on whether the UK and the EU reach a deal at all. This will depend largely on an agreement on the future relationship, on the basis that "nothing is agreed until everything is agreed".

Brexit brings scope for changes that may impact individuals, including their personal taxation position, and many questions remain unanswered. As matters develop, considered advice will be required.

If you have any questions, please get in touch with your usual Brodies contact, or one of the individuals below.

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