Baccata Trustees Limited

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Brexit : Whatever The Decision

In the short term we see business very much as usual. Existing clients, existing structures and projects whether commercial or on a more domestic footing, particularly in the line of succession planning involving trusts, will continue. People’s decision-making cannot stop; people need food, shelter and clothing. Business continues whether the UK is in or out of the European Union. The world does not stop.

In the medium term there will be change in how one does things, where one resides, or where and how one invests. These will be reviewed and decisions may be put on hold pending clarity of intra-EU “sovereign” relationships. A foreign company wanting to set up a European operation will wait and take a decision following clarity from the Brexit Referendum. A family thinking of locating to Europe for work or other reasons may hold off or reconsider their options as to which countries will be most suited to their needs.

In the long term little will change. European history is scattered with geo-political fault lines through the ages. Tragically there have been wars, but there have also been experiments (failed) in monetary unions; the Romans, Charlemagne, Napoleon have all tried this. Hitler’s vision under the Third Reich included monetary union. Also there have been different types of trading blocks; very successful empires have ruled for centuries; the Ottomans, the British, the Austro-Hungarian. Europe with its rich history and culture will continue to create and adopt models of socio-economic co-existence. These will fracture from time to time.

A family thinking of locating to Europe for work or other reasons may hold off or reconsider their options as to which countries will be most suited to their needs

A vote for Brexit will give rise to uncertainty very simply because it will require formal reassessment of many agreements, protocols between the UK and the European Union. Simply put the uncertainty arises from the simple fact that to make application to the EU for a new protocol or agreement can take up to six or seven years. In reality we doubt existing agreements or trading practices will be rescinded or undone in a provocative fashion. Trading Europe needs Britain as much as Britain needs Europe, but renewals or fresh agreements will have to take into account the different constitutional relationship of a Britain being outside economic union. This does not stop trade as is seen with Switzerland and Norway of course with the rest of the world. In our view a similar length of uncertainty would apply to the Channel Islands in their peculiar position of Crown Dependencies of an existing Contracting State, but we do not see this as a case for Jersey business being “blacklisted”. Jersey is welcomed, approved and judged by a whole gamit of different international bodies: Moneyval, UN, OECD Moody’s and numerous other organisations. Brexit or not, essential freedoms of movement of capital and labour within existing international protocols will not fundamentally change and this includes a full acceptance by the EU and the OECD that tax competition is a good thing.

The separate European economies have more fundamental issues to grapple with such as levels of public debt, as do other large trading blocks, the US and China. Whatever the outcome of the Referendum governments need to concentrate on this issue. Whatever the outcome the EU is urgent need of reform. This is recognised in other EU countries and the fact that there is a Referendum at all gives a sense of urgency to other EU countries to push for reform within Brussels. For the Baccata Group it is very much business as usual. Wealth still needs to be managed and structured in an atmosphere of quiet experience.