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Same-sex marriage is already legal in 30 countries around the world, and a dozen states allow same-sex civil unions, with rights equal to or similar to those of marriage, but without that name.

Europe is the continent with the highest number (sixteen) of states that allow same-sex marriage. The EU has been a pioneer in recognition and protection of LGBT+ rights, the EU Charter of Fundamental Rights (EUCFR) prohibits in its 21st article, discrimination on the grounds of sexual orientation. Furthermore the Directive  2000/78 requires EU Member States to promulgate legislation which prohibits discrimination on this ground but only in the area of employment; and Article 10 and 19 TFEU introduce the Unions aim to combat discrimination based, amongst others, on sexual orientation.

The UK officially left the EU on 31 January 2020. However, the UK continues to be treated for many purposes as if it were still an EU member state during the transition period, and most EU law continues to apply to the UK.  But once this period expires and UK’s withdrawal is completed, LGBTQ+ British nationals will lose the rights they enjoyed as Union citizens under EU law. In particular, EU citizenship entitles free movement between EU Member States and to be joined in the host Member State by their close family members. In the recent Coman ruling, the CJEU clarified that EU law requires that (LGBTQ+) Union citizens can be joined in the host Member State by their same-sex spouse, irrespective of whether that State recognises same-sex marriages. Nonetheless, due to the loss of EU citizenship, British nationals who have contracted a same-sex marriage will no longer be covered by the Coman ruling and, thus, they will not be able to rely on EU law in order to require EU Member States that have not opened marriage to same-sex couples to accept their same-sex spouse in their territory.

Furthermore, if there is no change in the EU withdrawal bill, the EU charter will no longer be valid in the UK. Meaning that Brexit will erase the (minimum) EU safeguards applicable to its Member States as these will no longer be binding to the UK.

Therefore, it cannot be excluded that in the future there could be regression in the protection of LGBT+ rights. However, this does not seem likely but as it will be up, solely, to the will of the UK parliament, changes will become bureaucratically easier.

Finally, beyond binding legal instruments, the EU is also a highly-effective soft law actor and by shaping its agenda and creating a policy and normative framework that enhances the position of sexual minorities, it has tangibly improved the social, political and economic position of LGBTQ+ individuals across the Union. As a result of Brexit, LGBTQ+ persons who are resident in the UK are no longer able to benefit from this framework. Moreover, the UK is no longer subject to (soft) supervision through submission of data and UK-based NGOs and academic institutions are no longer eligible to apply for EU funding to support research or other activities which aim to combat discrimination against sexual minorities and/or to raise awareness regarding the matters concerning LGBTQ+ persons.

While the exact consequences of Brexit may be impossible to predict it, can be concluded that there will be no substantial change to LGTBIQ + rights. However, attention will have to be paid to the possible future changes that the British government may make do to its domestic law.

Written by Sara Caselles Gayà

Read more about Family Law.

Nowadays, the member countries of European Economic Area (EEA) - made up of twenty-seven countries of EU, plus Iceland, Liechtenstein and Norway - have benefited from the Immigration Regulations 2016. This legislation have allowed European citizens and family members to reside in UK for a certain time (right of initial residency for three months) with the only requirement of having to prove through a valid national ID card or valid passport the belonging to any of the Member States.

Once this initial period of residence runs out, those who want to extend their right of residence in the UK is required to comply with one of the following situations; 1) Job seeking, 2) Working, 3) Self-employed, 4) Studying, or 5) Self-sufficient. According to one of these categories, the residency applicant will be officially named “qualified person”. This “qualified person” could then gain the right of permanent residency after five years of continuous stay. This right of residency grants an indefinite leave to remain in UK.

In order to fulfil this previous period of five years of continuous residency and so to satisfy the right of permanent residency, the applicant must not have been absent from the UK for more than six months in any twelve months period given. This means at least six months per each year of effective residence.

However, following the UK’s exit from the EU, this set of rights has been substituted by the so-called Settled Status. For this reason, in order to protect and safeguard the rights of European people to legally reside in the UK, the EU Settlement Scheme Applications has been set up. It applies to EU citizens from European Economic Area and their family members. This EU Settlement Scheme Applications, which assembles the Settled Status, must be requested by all EU citizens and their family members living in UK who wish to remain working and living in the UK after 31 December 2020. Despite of this regulation, Irish citizens maintain a specific regime and do not need to apply for the EU Settlement Scheme.

Within the Settled Status, there are two fundamental classification categories that are closely linked to the legal situation above explained. First, EU citizens that have been residing for less than five years in the UK will obtain the Pre-settled status at the EU Settlement Scheme Applications. Meanwhile, secondly, those who can prove five years of effective residence in the UK will acquire the Settled status. The status obtained will exclusively depend on how long the applicant has been living in the UK since the time of applying. It is important to mention that civil rights will be different according to the status obtained.

At this point, it should be noted too that the application at the EU Settlement Scheme is voluntary. Moreover, an application is not strictly necessary once obtained the indefinite leave to remain. However, the UK authorities always recommend registering in order to avoid defencelessness, legal uncertainty or being unable to evidence their own residency or that of their family members.

In conclusion, it seems that the UK wants to maintain a certain priority of rights for EU citizens in comparison to other foreigners. Such is the reason for the voluntary EU Settlement Scheme. It grants some certainty to all EU citizens currently residing in the UK. Nevertheless, inversely, all EU citizens who enter the country from the 1st of January 2021, and who expect to remain, will have to accept the whole immigration limitations that British Government has laid down. There will then be no difference between being a EU citizen or not.

Written by Alfredo Serrano De Haro

Read more about Immigration Law.

The agreement covers:

• trade in goods and services, including provisions on rules of origin, preferential tariffs and quotas
• intellectual property
• geographical indications
• geographical indications

The UK-Chile Association Agreement will help strengthen the trading relationship between Chile and the UK as it will grant businesses and consumers certainty. By entering this agreement, both countries ensure that there is no disruption of their trade flow. Additionally, UK manufacturers will benefit from preferential access to the Chilean market to sell their goods, and UK consumers will benefit from lower prices on Chilean goods as well as more choice on products like wine, fruits and nuts.

The UK-Chile Association Agreement replicates some elements of the EU-Chile Agreement, such as provisions on political dialogue, increased economic ties and other forms of cooperation between the two regions on issues like human rights.

Then International Trade Secretary Dr. Liam Fox commented on the event saying: “Today we have signed an important trade continuity agreement as we prepare to leave the EU. This will ensure there is no disruption to British business exporting to Chile after we leave the EU”.

When will the agreement enter into force?

The UK ceased to be a member of the political institutions of the EU on January 31st 2020. However, it will continue to be treated as a member of the single market and customs union until December 31st, 2020, which is the end of the transition period following its departure from the EU. The EU also requested that third countries with EU trade agreements treat the UK as a member state during this period.

Thus, the UK-Chile Association Agreement will not enter into force while the EU-Chile Agreement continues to apply to the UK.

Written by Lucía Fernández

Read more about Corporate & Commercial.

With trade totaling at £31.4bn and 9,500-UK based businesses exporting goods to Japan, it remains Britain’s 11th largest trading partner and 4th largest outside the EU. Discussion has been underway between London and Tokyo to determine the specificities of their post-Brexit trading agreement leading to what could potentially be the most advanced global trading agreement to date. The UK hopes to build upon the already established EU-Japan Economic Pact Agreement (EPA), whilst Japan affirms that it will not simply ‘cut and paste’ the same agreement it holds with the European Union and apply it to the United Kingdom.

Tokyo, however, does hope to see a number of procedures implemented during the Brexit process. They place great importance on the UK and EU maintaining market integrity and remaining attractive destinations for business where “free trade, unfettered investment and smooth financial transactions” are ensured. The Japanese Government requested that the EU and UK adhere to four general terms during the Brexit process:

• Transparency
• Sufficient transition periods
• The publication of any changes to the process
• Safeguarding market integrity
• The maintenance of free trade between Japan and the UK

What is clear is Japan and Britain’s interest in forming post-Brexit agreements, with British authorities predicting that a bilateral trade deal could increase GDP by around 0.07 per cent, or £1.5bn, in the long-term.

Britain’s interest in forming relations with Japan is not limited to simply gaining access to their markets. Britain hopes to join the Trans-Pacific Partnership (TPP), of which Japan is one of the 11-member states, in order to bolster its post-Brexit economy and form trading partnerships with economic superpowers.

Therefore, Britain may look to accept the inclusion of investor-state dispute settlement mechanisms suggested by Japan in their recent trade negotiations as these mechanisms have been adopted by the TPP. In addition to this, Britain may choose to accept Japan’s instant post-Brexit zero tariff suggestion on Japanese automotive products to keep the Japanese Government on side when it looks to join the TPP.

British and Japanese bi-lateral relations will remain strong and effective post-Brexit trade deals with regards to the areas of STEM will be drawn-up, what remains to be decided, however, is whether Japan will be subject to free-trade agreements with the UK.

Read more about Corporate & Commercial.

What are the advantages and disadvantages of free ports?

Supporters of free ports allege that it attracts business and boost trade and manufacturing industry.

For instance, the individual pieces of assembling a car are produced in different countries, in a free port scenario the manufacturer could import all those pieces, saving costs, to a factory within a free port area.

In a free port goods can be brought in customs free, processed or stored and then re-exported. Conversely, critics warn the risk of free ports being used to avoid tax and launder money.

Does the EU prevent the creation of free ports?

No, free ports are permitted in the EU. In the majority of the countries, these free ports existed before becoming members of the EU. In fact, seven free ports located in UK operated from 1984 to 2012. Currently, there are not free ports in UK, but there is one on the Isle Man.

Why UK Government consider that Brexit is an opportunity to create free ports?

The UK Government argued that European free ports are more restricted and limited when compared internationally. The UK Government would like to take the opportunity Brexit brings to create new free ports following the American model of Free Trade Zones.

The UK Government has argued that free ports could attract investment and generate new jobs but critics say it could induce money laundering operations.

UK Government launches free ports consultation

On 10 February 2020, the government has launched a consultation on creating up to 10 free ports with special tariff and duty status with the objective of opening it for business in 2021.

The consultation was intended to close on 20 April but the government considers that key sectors with a special interest in this policy such as: local government, ports and businesses, are facing challenges due to Covid-19. Therefore, the Free ports consultation will be extended to close on 13 July. Responses can be submitted through the existing gov.uk portal until this date.

Read more about Corporate & Commercial.

Comprobación limitada

In this category we can find three subtypes of notifications:

• Notificaciones de Requerimiento: you should submit the documentation required by the Spanish Tax Authorities in the said Notificacion de Requerimiento. That documentation must be submitted in the place and the period indicated in the notification. If the submit is delayed or not done, it will be a penalty.
• Notificaciones de propuesta de liquidación: they modify or correct, at your discretion any finance statement you have submitted. If you do not agree, you can submit claims within the deadline to do so.
• Notificación de Resolución del procedimiento: once allegations have been submitted, the Spanish Tax Authority responds with the resolution and agrees to a settlement if appropriate. If you are not satisfied, it can be appealed within the established period.

Providencia de apremio

The Spanish Tax Authority use this procedure to collect a debt once the corresponding period of voluntary payment has ended. The Spanish Tax Authority applies a surcharge on the debt in addition to the interest for the delay in the payment.

Notificación de inicio de investigación: inspección fiscal

This inspection can be arbitrary, simply due to a selection process for all taxpayers, or it may be due to doubts raised by the inspectors in relation to a possible fraud. In this notification, the start of the procedure is informed and the taxpayer must appear before the Spanish Tax Authorities.

Notificación de expediente sancionador

The Spanish Tax Authority confirms that you have committed a fault in breach of the tax regulations. You are then informed about the beginning of the sanctioning proceeding indicating the amount to be paid for the infraction committed. If you do not agree with the imposition of the sanction, within the period indicated in the notification, you must send the documentation proving that you have not committed any breach of the tax regulations.

Notificación de diligencias de embargo

This is the notification of a foreclosure proceeding carried out by the Tax Agency against the person or company that is not uptodate with any payments due to the Spanish Tax Authorities, in order to collect the amount of the debt.

For example, balance withholding in your bank account with the amount due or property seizures.

Electronics Notifications from The Spanish Tax Authorities. I am in UK, How can I register in The Electronics Notifications System from The Spanish Tax Authorities?

You should go to the spanish consulate in London carrying your NIE, your Passport and its photocopy and you will be provided with a digital signature with which you will have access to your electronic notifications from the Spanish Tax Authorities.

Effects of Electronic Notifications

Electronic notifications will be considered as taking place at the time of access to the content of its notification or, if access is not carried out, after 10 calendar days from their dispatch without access to the same.

All communications and notifications will be available for 90 calendar days in the enabled electronic address. During this time, you will be able to view the full content as often as you wish (the content can only be viewed for 90 days if you have accessed it within the term of 10 days; if it has expired, you will not be able to view the content). After this term, it can only be viewed in the Tax Agency E-Office.

The electronic notification system confirms the time and date in which the information is available for those interested in the notification. Similarly, the system confirms the date of access of the recipient to the content of the document notified or that on which the notification was rejected as the legally established term had expired.

If, prior to the date of receipt of the communication of the notification, you have accessed the Tax Agency E-Office and you have received the notification electronically, the date prevailing to all effects is that of the first of the notification correctly carried out.

Written by Laura Gallego Herráez

Read more about Taxation Law.

Having subsequently looked at a number of these unsuccessful applications, we believe this is down to two principal factors:

1. the applicant’s inability to produce the relevant information in the clear and concise manner that lenders expect so that they can rapidly analyse and decide whether to approve the application and provide the funding and/or;
2. not knowing how to discern which lenders are more likely to approve their application.

At Scornik Gerstein LLP, we have had numerous exchanges with the government approved lenders and have developed the expertise required to help our clients with their applications so as to successfully obtain funding through the CBILS & BBLS loan programmes.

We hope we can help you to swiftly and successfully apply for this unique borrowing opportunity.

Please feel free to contact your relationship Partner either Antonio Arenas (on 07540667073 or antonio.arenas@scornik.com) or Xabier de Beristain Humphrey (on xabier.deberistainhumphrey@scornik.com)

(Keep reading below for further information about the CBILS & BBLS loan programmes extracted from the UK government’s dedicated website)

Bounce Back Loan Scheme (BBLS)

(Finance of up to £50,000)

About the scheme

The Bounce Back Loan Scheme (BBLS) provides financial support to businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak and that can benefit from £50,000 or less in finance.

How it works

A lender can provide a six-year term loan from £2,000 up to 25% of a business’ turnover. The maximum loan amount is £50,000.

The scheme gives the lender a full (100%) government-backed guarantee against the outstanding balance of the facility (both capital and interest).

The borrower always remains fully liable for the debt.

Key features of the scheme

Coronavirus Business Interruption Loan Scheme (CBILS)

(Finance of up to £5 million)

About the scheme

The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.

How it works

British Business Bank operates CBILS via its accredited lenders. There are over 40 of these lenders currently working to provide finance. They include:

• high-street banks
• challenger banks
• asset-based lenders
• smaller specialist local lenders

A lender can provide up to £5 million in the form of:

• term loans
• overdrafts
• invoice finance
• asset finance

CBILS gives the lender a government-backed guarantee for the loan repayments to encourage more lending.

The borrower remains fully liable for the debt.

Under the scheme, personal guarantees of any form will not be taken for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:

• recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied;
• a Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBILS-backed facility

Key features of the scheme

Coronavirus Business Interruption Loan Scheme (CBILS)

(Finance of up to £50 million)

Specifically, it facilitates access to finance for businesses with a turnover above £45 million, the upper limit for the existing smaller-business focused Coronavirus Business Interruption Loan Scheme (CBILS).

How it works

A lender can provide:

• up to £25 million to businesses with turnover from £45 million up to £250 million
• up to £50 million to businesses for those with a turnover of over £250 million

Finance is available in the form of:

• term loans
• revolving credit facilities (including overdrafts)
• invoice finance
• asset finance

CLBILS gives the lender a government-backed partial guarantee (80%) against the outstanding balance of the facility.

The borrower remains fully liable for the debt.

Under the scheme, personal guarantees of any form will not be taken for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, but claims cannot exceed 20% of losses after all other recoveries have been applied.

Key features of the scheme

Read more about Corporate & Commercial.

In order to grant such exemption, it is required for the investee company to be resident in a country with which SP has in place a DTA to avoid double taxation (this is the case of UK as above indicated). The problem resides with investee companies that, complying with all of the above, are established in Gibraltar.

Gibraltar's CT sets an average nominal rate of 10%, and since it is an integrated territory in the UK, the exemption established under Article 21 of the SPCT will apply, since both requirements are met: minimum nominal rate of 10% and existence of DTA.

Notwithstanding the precept referred to above provides that: "In no case shall this requirement be deemed to have been fulfilled when the investee is a resident of a country or territory classified as a tax haven, unless it resides in a member state of the European Union (EU)".

Nowadays, despite the fact that Gibraltar is considered by SP as a tax haven, UK is a member state of the EU, so the exemption of Article 21 SPCT is put into practice. Following the effective departure of the UK from the EU, this exemption would remain without effect on Gibraltar companies, as the exception in the case of an EU Member State would not be fulfilled.

This being the case, Governments of the UK and SP have each approved in their Council of Ministers an information exchange agreement that would allow the exclusion of Gibraltar from the list of tax havens for SP, as long as the agreement is ratified by the Congress.

Patent Box

Article 23 SPCT – Reduction of income from certain intangible assets (Patent Box).

In accordance with Section 1 of Article 21 of the SPCT, in order for the application of the reduction to be applied, it is required that the assignee does not reside in a country or territory of zero taxation or classified as a tax haven, unless it is located in a EU Member State.

Therefore, this reduction may continue to apply to Gibraltar companies from January 2021, provided that the goverment of SP ratifies the agreement between the UK and SP which would exclude Gibraltar from being considered a tax haven.

In the rest of the UK territories the DTA will apply.

Exit Tax

Article 19 SPCT – Exit tax

When a company resident within Spanish territory transfers its residence outside of SP the difference between the market value and the tax value of the patrimonial elements owned by the company will be included in the tax base of the CT settlement in the year in that the transfer of residence occurs. However, when the transfer of residence is made to a Member State, the integration into the tax base will be deferred until the date of transmission of the affected assets to third parties.

In other words, the Member States enjoy a privilege vis-à-vis with third countries, being able in the first case to postpone the tax obligation resulting from the change of residence. From January 2021, this privilege will not apply to transfers made to the UK.

Article 14 SPCT – Provisions and other expenses

Article 14 SPCT includes the deductibility of the contributions made by pension provider companies provided for in Directive 2003/41 / EC to employment pension funds authorized or registered in another Member State (as long as certain requirements are met). After the effective exit from the EU, contributions to UK employment pension funds will not be considered deductible expenses as this is a purely financial matter.

Written by Álvaro Diz Sánchez

Read more about Taxation Law.

Where did the negotiations stop?

On 5th of March 2020 both sides met in Brussels for the ´first round´ of negotiations. When they were planning about to meet for the second round they decided put on pause the Brexit negotiations to focus on combat the spread of coronavirus.

However, on 18th March, British and European negotiating teams exchanged draft legal texts and officials had been discussing and reviewing those texts during one week by videoconference.

Where are we now?

On 15th of April 2020, David Frost, the UK´s chief negotiator, and Michel Barnier, the EU´s chief negotiator, had a meeting by video conference. Both sides reviewed the achievements and technical dialogue carried out during the first round of negotiations.

The next round is rescheduling for the weeks of 20 April, 11 May and 1 June.

The two parties continue to show high divergence of opinion on the following matters:

• TRADE DEAL AND THE LEVEL PLAYING FIELD: the level playing field is a trade-policy term that refers to common standards and regulation which seeks to avoid business in one country undercutting their competitors in other countries in areas such as taxation, environmental protection or workers' rights. It is therefore necessary to establish whether the UK will continue adhere to such standards or if in the contrary will be free to stablish its own.

 

• FISHERIES: The two key issues are:
1. Agreement on the access of European Fishermen to UK waters and vice versa. British fishing organisations consider that due to the EU’s Common Fisheries Policy they have not received their fair and reasonable share of quotas.
2. Determination of the shares of the Total Allowable Catch (TAC) for each stock which should be allocated to UK and EU fishers.
• THE EUROPEAN COURT OF JUSTICE’S (ECJ) ROLE IN DISPUTE SETTLEMENT: UK Government wants the ECJ not to have jurisdiction in the UK.

 

• SECURITY: EU says that a crime fighting agreement would not be possible if the UK withdraws from the European Convention on human rights. Although UK is not requesting entering into the EU policy agency Europol, nor the EU law enforcement agency Eurojust wants to work with both of them. Moreover, UK is seeking to sign an extradition agreement to substitute the European arrest warrant.

 

• TRANSPORT: lorry and goods vehicle drivers. The EU insists that British lorry drivers cannot expect to have the same rights as their European counterparts.

Will the Brexit transition period be extended due to Coronavirus?

The UK Government can ask for an extension of the transition period of one or two years. The deadline to do so expires on 1 July 2020.

A high-level meeting is scheduled to take place in June to analyse the progress made so far with a view to determining the framework for relations between the EU and the United Kingdom, at the end of the transition phase, which currently remains set for 31 December 2020.

Global Institutions such as The International Monetary Fund (IMF), has asked the United Kingdom via her director Kristalina Georgieva, to ask the European Union (EU) for an extension of its post-Brexit transition period amid uncertainty induced by the outbreak of coronavirus in all the world. The UK government is however not inclined to attend such request since any transition extension period could be perceived as an extension of the uncertainty.

Read more about Corporate & Commercial.

• Scenario 1: 8-week confinement period and a quick economic recovery from the health crisis.

 

• Scenario 2: same confinement period as before, 8 weeks, but in this case the measures taken by the government to mitigate the economic consequences of the coronavirus have been less effective, generating a liquidity problem and consequently, solvency troubles for businesses.

 

• Scenario 3: 12 weeks of confinement. The prolonged State of Alarm will inevitably produce a negative impact on the economy and delay the return to normality.

The three scenarios have been reproduced and unsurprisingly, all forecast a dull future. Employment drops and so does consumption as many families see their income reduced. Unemployment rate is estimated to reach the unsettling figure of 20,6%.

Private investments are paralyzed due to uncertainty and public expenditures increase as a consequence of the measures taken by the government to secure the populations wellbeing. In all scenarios Spain’s GDP is significantly reduced, ranging from -6.6% in the first scenario to -13,6% in the third. These predictions reaffirm the ones made by the International Monetary Fund at the beginning of April, in which they estimated an 8% drop in Spain’s GDP. The percentage translated into numbers is of approximately 99.000M€. The data anticipates an economic recession that will only be alleviated by the capacity to reactive part of the damaged productive activity which, at the same time, depends on the perception of health risk in the coming months.

Looking ahead to 2021, the Spanish economy can be expected to recover a significant, but not complete, part of the flow of the activity and employment expected before the pandemic.

Written by Sara Caselles Gayà

Read more about Taxation Law.