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Brexit Newsletter December 2018

Brexit Newsletter December 2018

The state of Brexit: Are you prepared for a no-deal Brexit?



Christophe Diricks

Partner, Head of Alternative Investments

KPMG in Luxembourg


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The UK Prime Minister survived a vote of no confidence but is left with a divided cabinet and no parliamentary support.

The UK Parliament will hold the historic vote on the Brexit agreement during the week of 14 January 2019. The vote was initially scheduled for 11 December but was postponed by Theresa May, provoking Conservative MPs to trigger a vote of no confidence in the Prime Minister.
While Theresa May survived the vote, it has become clear that she lacks the necessary support for her agreement, and that it may be headed towards defeat. This raises the question: what are the likely implications of such a defeat? Given that the EU has clearly stated that there is no room for renegotiation, below are some of the possible scenarios for the UK.

Possible scenarios:

‘Norway for now’ – a temporary compromise that respects the 2016 referendum results by removing the UK from all EU political institutions but keeps the country in a close economic partnership with the bloc, similar to the arrangement between Norway and the EU. Some members of Parliament (MPs) are supporting a full customs union with the EU as an amendment of the existing deal.

Second referendum – this possibility is getting more and more traction as many MPs view it as the preferred option. It seems that the public opinion has also shifted in that direction– according to the latest YouGov poll, public support for remaining in the EU is growing.

Revocation of Article 50 – the European Court of Justice has ruled that Britain could unilaterally cancel its notification to leave the EU. The ruling at hand means that the British Parliament could possibly avoid no-deal Brexit by voting for the revocation of Article 50.

No-deal scenario – the UK crashes out of the EU without a deal. Even though the future relationship of the EU and UK will fall under the rules of the World Trade Organization, the practical implications have not been fully considered and this will ultimately lead to chaos.

The UK Prime Minister survived a vote of no confidence but is left with a divided cabinet and no parliamentary support.

Check out our Brexit Navigator to find out the actions you can take to be fully prepared.

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Setting up and maintaining an AIFM

Do you need assistance in the set-up of your alternative investment fund management company (regulatory, staffing, transfer pricing and audit)? Please check out our AIFM setup and maintenance brochure.

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Any tax advice in this communication is not intended or written by KPMG to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein.The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.

Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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