We reported on the Brexit negotiations regarding Gibraltar a few weeks ago, when a stipulation created by the EU commission had many Gibraltarians concerned about their future. Clause 24 of the Brexit guidelines stated that Spain had the right to prevent any agreement between the UK and the EU from also applying to Gibraltar. Many felt that the EU had given Spain too much control over the future of Gibraltar and saw the clause as a way for the EU Council to bully the UK and Gibraltar into a deal neither of them wants.
Both the British government and the Chief Minister of Gibraltar remained confident that sovereignty was not up for discussion, respecting the voices of Gibraltarians, who’ve always strongly expressed the desire to remain British.
The above statement from Dastis is therefore likely to come as a relief to many. Tory backbencher Bob Neil was one of those to welcome Spain’s change of stance on the matter, saying it was very important for both the UK and Gibraltar to maintain a good relationship with Spain after Britain leaves the EU.
While it will be reassuring to know that Spain doesn’t intend to put any major road blocks in the way of Britain reaching an exit agreement, the Spanish government isn’t ready to completely give up the rare opportunity offered to them by Brexit to strike a different deal over the small territory.
Dastis went on to say to that the issue is of “great importance” to his country and Spain will aim to convince the people of Gibraltar that a joint-sovereignty deal would be beneficial for them and worth exploring. If a co-sovereignty deal were to be made, this could mean Gibraltarians are given dual Spanish and British nationality.
Dastis’s hope for co-sovereignty is an echo of the comments given by the acting Foreign Minister, Jose Manuel Garcia-Margello, directly after the referendum last year, when he said, “I hope the formula of co-sovereignty – to be clear, the Spanish flag on the Rock – is much closer than before.”
However, considering the determination of Theresa May, David Davis, and the rest of the British negotiating team not to have even the slightest bit of leniency on the matter, Dastis’s comments could be seen as a concession of sorts by Spain.
Because the Spanish Foreign Minister has suggested that Spain aren’t going to put up a fight over sovereignty, it now appears very unlikely any change will happen. But it will all be down to how negotiations unfold between Britain and the EU.
It’s not just the 300,000 inhabitants of Gibraltar who will be concerned about the news regarding the Rock’s status. For instance, anyone with a Gibraltar QROPS.
Gibraltar is a popular jurisdiction for pension transfers due to the multiple benefits a Gibraltar QROPS bring to pensioners. These include the ability to withdraw a 30 per cent lump sum instead of a 25 per cent lump sum and no UK income tax as long as they live abroad. If a co-sovereignty agreement were to occur, the rules regarding Gibraltar QROPS might change, but even if such an agreement isn’t made, there are still many other ways the overseas schemes could be affected during negotiations.
Brexit negotiations are enough to make any saver feel unsure over what is best for their money. If you have set up a Gibraltar QROPS, or are thinking of moving your pension into one, and are concerned about what the future holds for your money, contact a Blacktower financial adviser today. Our advisers can assist you in a full range of financial matters by always keeping abreast of all Brexit developments and being able to guide you and your money along the right path.
In the meantime, watch this space for any relevant advancements in Brexit negotiations that could have a potential impact on the lives of expats.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
One of the most common questions asked of expat financial services firms is what should clients do with their pensions. Some wish to keep all their money in a UK-based pension, some will look to transfer to a Qualifying Recognised Overseas Pension Scheme (QROPS) and others will want to take a tax-free lump sum from their fund. In short, what an individual chooses to do will depend heavily on their personal circumstances together with any advice they receive from their expat financial services professional.