By Bejay Browne
British expats in Cyprus could lose a host of privileges if Britain withdraws from the EU, a popular expat forum has warned. The website is urging them to register to vote in the UK’s in/out referendum, which could take place as early as the middle of next year.
The vote’s outcome could have a real impact on British expats living in other EU countries – but the close ties between Britain and Cyprus should limit the damage, experts say.
The widely read expat forum CyprusExpat.co.uk warns that a Brexit could mean expats lose the right to freedom of movement within the EU and may need to apply for visas. The European health insurance card would also probably no longer be valid and British state pensions could be frozen.
Concerned by a possible Brexit, the website recently posted a plea to British nationals here to register to vote. The referendum must be held before December 2017 but could take place as early as mid-2016.
“While current indications suggest that Britons would vote to stay in, referendums are often unpredictable and take on a life of their own. It is certainly not beyond the realms of possibility that we could see Britain vote to leave when the vote is held, most probably next year,” said Cyprus and EU expert James Ker-Lindsay, a senior research fellow at the London School of Economics.
He said it was difficult to predict exactly how it would affect UK expats living in Cyprus, but he believed that London and Nicosia would want to maintain a close relationship and minimise any friction caused by Britain leaving the EU.
“I suspect that this will mean that any bilateral agreement reached would probably be fairly open and allow for a lot of the current advantages both sides enjoy as members of the EU. Although immigration and freedom of movement are very hot topics in Britain, I do not envisage that steps will be taken to create major new restrictions on Cypriot citizens living and working in the UK.”
Brexit could spell the loss of expats’ right to remain in an EU country and freedom of movement within the EU. Under the Schengen agreement, expats would be allowed stays of up to 90 days out of 180 unless a permanent residency card is issued by the state of residence, with proof of sufficient income and health insurance. Visas for work and travel may also be required. However, Cyprus isn’t yet a member of the Schengen area.
Ker-Lindsay said that such steps would be extremely unpopular within the British Cypriot community. Likewise, and on the basis of reciprocity, he said it was unlikely Cyprus would want to close down the easy access its citizens have to the UK.
“If the worst came to the worst, I am actually hopeful that expats in Cyprus would be spared the worst effects of Brexit.”
Nigel Howarth, a Limassol based property advisor, who offers independent information and advice for Cyprus homebuyers and property investors, said that although it’s impossible to say exactly what would happen if a Brexit becomes reality, there would certainly be some anxiety and concerns. Like Ker-Lindsay, he does not believe freedom of movement for British expats in Cyprus would be an issue, as the UK is not a signatory to the Schengen agreement.
But he is concerned that a Brexit could mean the freezing of British state pensions, as is the case in other non-EU countries where reciprocal arrangements are not in place. Expats could also lose entitlement to UK benefits.
“My biggest concern would be the freezing of state pensions. Although I have private and occupational pensions, a freezing of the state pension would result in a lower standard of living. And we have already lost our winter fuel allowance,” Howarth said.
Another issue is healthcare. The European Health Insurance Card (EHIC) enables access to state-provided healthcare in European Economic Area (EEA) countries, including Switzerland, at a reduced cost, or sometimes for free. With a Brexit such access could be withdrawn.
As could other healthcare provisions. Currently an S1 form allows a British expat to register for healthcare if living in an EU country, Iceland, Liechtenstein, Norway or Switzerland if they are insured in a different EU country. This is typically the case of pensioners retiring abroad.
Howarth also questioned what would happen to sterling. A number of major financial institutions may move from the UK to another country (HSBC have said they will move to Hong Kong) – and some vehicle assembly plants and other businesses may also move, he said. This could lead to a rise in unemployment and sterling falling in value against other currencies, which could further lower expats’ standard of living, he said.
In contrast, Lou Cunningham, a partner at Blevins Franks international tax and wealth management advisors to UK nationals living in Europe, said he felt reasonably relaxed about the prospect of a Brexit.
“When I arrived in 2000, Cyprus was not in the EU, but the special rate of pension income, the double taxation agreement, and the high levels of trade were in place. Cyprus still values its relationship with the UK and to not immediately reinstate strong ties would be self-defeating,” he said.
Because so many British expats have retired here, he said he would expect the welcome to continue to be warm, although he warned a Brexit could mean an increase in red tape.
“Perhaps there would be a return to five-year yellow slips, rather than the present open-ended one, and some additional form of registration (the old Alien Registration Certificate), all of which was in place prior to May 2004, when Cyprus joined the EU.”
He added that moving to Cyprus to work might be trickier, with a return to the old practice of providing evidence that a Cypriot was not able to perform the task an expat has applied for, and perhaps a tightening up of the casual work done by expats.
“With regards to state pension rises, these were enjoyed before EU membership and I believe they are linked to reciprocal arrangements rather than EU membership,” he said.
Ker Lindsay said that the real impact of Brexit raises many different questions and areas of uncertainty, and other factors that need to be taken into account.
“It’s certainly possible to see Cyprus having to take a position on an issue that it might disagree with and would not have taken if it could negotiate directly with Britain. Therefore, while one would hope and expect that Cyprus and the UK could reach a mutually beneficial agreement in the event that the UK leaves the EU, it is certainly not possible to take this for granted,” he warned.
To register to vote in the referendum: https://www.gov.uk/voting-when-abroad