Press Room: Tax Release
Keep Calm and Carry On
On June 23, 2016, the United Kingdom's (UK) citizens decided in a 51.9% vs. 48.1% decision to leave the European Union (EU). The referendum turnout included more than 30 million voters. The outcome follows weeks of hotly contested debate around whether or not the UK would break ties with the EU after 43 years of membership. Following the vote to leave the EU came the resignation of British Prime Minster, David Cameron. His resignation is expected to occur by October. In order for the UK to officially exit the EU, it first must elect a new prime minister and will also need to invoke Article 50 of the Lisbon Treaty.
Moving forward, this vote will have a dramatic impact on the UK; however, it may take up to two years before the country can actually disentangle itself from the numerous EU institutions. The UK will need to renegotiate numerous trade agreements with the remaining EU members and begin positioning itself for its economic future.
While this vote rattled financial markets and currencies around the world, the long-term financial impact remains to be seen. The current vote has no direct impact on major legal or tax positions for the foreseeable future.
Although the UK has chosen to Brexit the EU, it will remain an important partner to the rest of Europe. It will not only continue to serve as a financial hub, but also as an extremely large exporter of goods and services as well as a military power.
Many logistical events must occur before the UK can make an official Brexit from the EU. This process is expected to take several months if not years before completion. Because of the many moving parts, we see no clear tax or legal implications on which sound decisions can presently be made. Accordingly, we will continue to monitor events closely and provide practical insights as the future becomes clearer.