The European Union has been a structure under stress, facing significant change, for many years. Its development from the European Coal and Steel Community into the European Economic Community, then to the European Community and now the European Union, was one of incremental steps. It was perhaps the fall of the Berlin wall, the reunification of Germany and addition of many more Member States after 1990 that was the catalyst for many of the strains it faces today. Its competence, in relation to taxation, has in the past been limited to the European sales tax, namely value added tax (VAT). The problems with the single currency – the euro – wax and wane, and concerns as to Greece's place in it have now been replaced by those of Italy. Its structural difficulties remain currently unchanged and it remains to be seen whether France and Germany can find any acceptable common ground for its reform. Further, the referenda in Denmark and the United Kingdom demonstrated a general unhappiness of EU citizens with its direction of travel. Recent trends in Italy, Austria and the Visegrád Group of Poland, Hungary, Slovakia and the Czech Republic are seen as representing a sea change from the liberal social democratic model of the majority of Member States. And although the overall improving economic outlook and 2017 election results in the Netherlands and France, in which right-wing anti-EU parties were defeated, gave the European Union and its various institutions hope that a corner had been turned, the 2018 Italian election results were a clear rebuke to this.

All Member States continue to be focused on economic growth, debt reduction and maximising tax collection, particularly from corporations, while dealing with their citizens' concerns over immigration. EU institutions are conscious of the overwhelming priority to maintain the euro as a single currency and produce economic growth, notwithstanding global headwinds, and the Eurozone perspective and priorities continue to drive these Member States towards ever closer union. Further, relations with the United States are now strained. The United States' support of NATO can no longer be taken for granted and the German Chancellor Angela Merkel's statements as to the future of Europe being separate from the United States and United Kingdom indicate that geopolitics may also push EU Member States closer together. Moreover, the United States' wish to renegotiate the Paris Agreement, its tariffs on steel and aluminium, and disdain for the G7, has all given China an opening to be seen to stand with the European Union.

Uncertainties in Ukraine and with Russia moved the Baltic States firmly into the euro, in contrast to the non-euro Member States such as the Czech Republic, Sweden and Poland, who remain firmly outside. The two-tier eurozone/non-eurozone EU already creates significant tensions. Stark divisions in the United Kingdom, which were exacerbated by its referendum, would have objectively been expected to lead to a call for some form of compromise, but have instead resulted in considerable paralysis. The EU is particularly frightened of contagion and other dominoes falling. Brave political leadership may be in short supply, but other differences over and above that of the euro are, in any event, producing a more complex and multilayered EU.

While strictly not a federation, at many levels the European Union behaves like one. Since the Lisbon Treaty of 2009, the Treaty on European Union and the Treaty on the Functioning of the European Union govern its constitution and legislative processes. The relationship between its civil service (the Commission), the Member States' governments (the Council of Ministers) and the European Parliament is still a work in progress. The results of the European Parliament elections, held in May 2014, although producing generally anti-EU results in the United Kingdom and France, had been taken as a vote for business as usual by Parliament, which is flexing its muscles, particularly in the area of tax. In the field of anti-money laundering and tax evasion, the Commission appears to be siding with an increasingly vocal Parliament rather than with the Council of Ministers. For the May 2019 European Parliament elections, 27 of the United Kingdom's 73 seats will be apportioned to other Member States (in particular, France, Spain, Italy and Ireland), with an overall reduction of 46 seats from 751 to 705. However, there is no evidence that Parliament (or the Commission) has taken on board the implications of the more complex EU forces at work.

Even when reduced to 27 Member States, the European Union is a place of significant wealth. With a combined population of 510 million, just under 7 per cent of the world's population, it has approximately 22 per cent of the world's GDP and is its second-largest economy.2 The European Economic Area (EEA) consists of the European Union, Iceland, Liechtenstein and Norway (Switzerland being a member with Iceland, Norway and Liechtenstein of the European Free Trade Association but not in the EEA). Whether, in the future, the United Kingdom rejoins the EEA (or the European Union, for that matter) is an open question.

The economic prosperity of the EEA made it an increasingly attractive destination for those fleeing conflict and poverty to its south and east. If the United Kingdom exits the European Union, even if it remains in the EEA, the strength and prosperity of both the United Kingdom and the EEA are likely to be diminished.

Adding to these tensions are the problems associated with mass migration. The 2016 referendum in the United Kingdom as to whether it should remain in the European Union and subsequent serving of Article 50 notice to leave in March 2017 cast something of a shadow over the workings of the European Union, but is probably now somewhat down its list of priorities. The migration of both EU and non-EU nationals to the wealthier parts of the European Union brings its fundamentals into sharp focus. The free movement of labour and capital was designed to produce economic growth for both Member States and business. The demographics of most Member States require immigration to feed economic growth and counter falling birthrates. However, mass migration is an issue for all front-line Member States, such as Italy, Malta and Greece, and is also one for indigenous citizens who perceive that their own wages and standard of living are being reduced by the competitive market. In practice, most Member States have quietly found ways to limit freedom of movement, particularly for those not in employment.

In 2016 and 2017, France, Germany and the United Kingdom all suffered from highly publicised terrorist attacks. Being seen to deal with such threats effectively, while maintaining European traditions of tolerance and freedom, gave EU governments common problems and reasons to work together. However, memories quickly fade, and the political pressure for unity in the European Union always overrides any calls for cooperation with third-party states. EUROPOL and the Galileo project are examples of issues where the European Union cannot treat the United Kingdom as a special case.

However, against a backdrop of continuing security threats, it is unlikely that the European Union, its Member States and the EEA will be easily able to square the circle in relation to mass migration and economic growth. Freedom of movement will likely be quietly further curtailed.


The United Kingdom, which has been on the brink of a constitutional crisis in relation to Scotland and to a lesser extent Wales for some time, currently faces multiple potential political crises. The September 2014 referendum in Scotland as to whether Scotland should be independent, focused considerably on the continuing nature of the strange ragbag of arrangements between the UK government in Westminster and those in Scotland, Wales and Northern Ireland. Northern Ireland, a product of its history and geography, is also caught between numerous forces, with signs that its recent peace accord has perhaps been taken for granted. London, while having a larger population than each of those jurisdictions, has limited local government, while England as a whole has none.

Further, the United Kingdom's 2017 snap general election result, which produced no clear winner, came as a surprise to many. But the rise of the Conservative Party in Scotland in protest at the one-party Scottish Nationalist Party, which is the ruling governing party in the devolved national parliament of Scotland, should not have done. The Labour Party ran a far more effective and optimistic campaign, while the Conservative Party was, in general, blamed for calling an unnecessary election and asking voters to give it a blank cheque. They declined to do so. It would seem that many electors voted against a party rather than necessarily for one.

The timetable for Brexit is ticking and politicians are only now addressing the extremely difficult and complex fundamental questions that should have been considered before the EU Referendum rather than after Article 50 had been triggered.

The narrow margin of 4 per cent on a 73 per cent turnout in the UK's EU Referendum has left the country completely divided, and the 2017 general election has not healed these divisions. London and Scotland, by a 20 per cent majority, and Northern Ireland by a smaller one, voted to remain in the EU. The remainder of England and Wales, with the exception of some cities, such as Bristol, Liverpool and Oxford, voted by a significant majority to leave. The population and the main political parties are still riven by the question of the EU. Prime Minister Theresa May has surprised many by remaining in office, perhaps because any other leader would be more divisive. The Conservative Party does not currently show any sign of finding a way out of the quagmire it has got itself into. The Labour Party has also been divided by Brexit, but is now perhaps beginning to campaign against its downsides by labelling it 'the Tory Brexit'. Transitional arrangements, if agreed, are likely to last beyond December 2020.

Most English politicians, whether on the left or right, feel constrained by the result of the referendum. The negative economic effects and unpalatable political choice of either no deal or otherwise membership of the EEA have created the current political stasis. The Irish question adds further historical and current complications. The Scottish question has also not been fully resolved.

EU institutions have seen the referendum as an unnecessary distraction. The United Kingdom had previously been seen as a pragmatic and effective major EU Member State, but is currently seen as a laughing stock that is shooting itself in the foot, if not the head, and without any clear realistic vision as to its future. Whether it will have a government able to follow through any negotiations and enact any necessary treaty arrangements is still seen as questionable. The consequent downsides for the European Union have not been openly discussed. The necessary reductions in EU income are unlikely to result in reductions in spending, and current proposals to move economic support from the east to the south of the European Union would create both winners and losers. The exercise of raw political power may not be pretty.

The loss of a major common law state will leave a more homogeneous civil law European Union, a less open market and will leave the European Union less outward-looking. It will be the poorer for it.

The UK government and its institutions have been expending virtually all of their energy in negotiating with the European Union and attempting to resolve the effects of its exit from the European Union on its laws and structures, while being blown and buffeted by events. This will surely continue for many years to come. While the absence of a written constitution has enabled flexible and incremental change in the United Kingdom, all of these tensions will continue to create mounting pressure for some new relationships between the various existing UK structures. In the meantime, it is very likely that the United Kingdom and EEA economies will decline, while at the same time the proportion of UK government spending will inevitably increase.


Generally, the EU has had no competence over personal taxation for individuals, such matters being for individual Member States and outside its competence. However, with increasing frequency, the Court of Justice of the European Union (CJEU) has held3 that the right to free movement of persons, goods, services and capital within the EU applies to limit the taxation rights of Member States. Inheritance was found to be a movement of capital and many Member State governments have been forced to amend existing tax rules. In the case of Austria, this led directly to the abolition of gift and inheritance tax.

As a result, the EU Commission looked at two separate initiatives:

  1. the effects of inheritance taxes on the rights of free movement;4 and
  2. double non-taxation.5

The limited competence of the EU in these areas has, however, meant that the recommendations were advisory only.

Over the years, the EU has developed various cross-border structures such as the European Company (SE) and the now-lapsed proposal for a European Foundation (FE). However, the tax treatment of these structures is not uniform. There has as yet been no proposal for an EU-wide tax transparent vehicle such as an LLC, LLP or SCI.

By contrast, the EU has concentrated much firepower on corporate taxation. There is broad consensus on the part of EU institutions, Member States and the Organisation for Economic Co-operation and Development (OECD) on tackling aggressive tax planning by corporations. Tax justice and a level playing field are seen as a priority. The EU Commission has presented its Action Plans for Fair and Efficient Corporate Taxation in the EU and has relaunched the Common Consolidated Corporate Tax Base.

The proposed EU–US Transatlantic Trade and Investment Partnership, the main goal of which was to remove regulatory 'barriers' that restrict the potential profits to be made by transnational corporations on both sides of the Atlantic, is now seen as a dead duck. The EU–Canadian agreement, however, was finalised in the EU Parliament in February 2017, subject to ratification by national legislatures. This can no longer be assumed to be automatic. Belgium in the past, and now Italy and perhaps the Visegrád Four, may put a spoke in the wheel. The European Union appears to be making good progress with free-trade agreements with Japan and Australia. Further legislation continues to be made. The Regulation on Mutual Recognition of Protection Measures in Civil Matters came into force in January 2015 and binds the United Kingdom and Ireland, but not Denmark. The Brussels I Regulation was reviewed and amended: Brussels I bis came into force in January 2015.6 The Brussels II bis Regulation has been under review and is about to be finalised. The European Union (now including Denmark), Mexico and Singapore have ratified Hague 37 on choice of court agreements that entered into force on 1 October 2015. It applies in Ireland (and the UK).

Rome IVa (EU) 2016/1103, dealing with matrimonial property7 and Rome IVb (EU) 2016/1004, dealing with the property effects of registered partnerships8 came into force on 29 July 2016 and will become fully effective on 29 January 2019, but were Regulations subject to enhanced co-operation and will only apply in 18 Member States. This is dealt with in more detail below.

Regulation (EU) 2016/1191 of 6 July 2016 on promoting the free movement of citizens by simplifying the requirements for presenting certain public documents in the European Union was not subject to any opt out by the United Kingdom or Ireland and will become fully effective on 16 February 2019.

How the United Kingdom is to extract itself from the EU acquis, built up over 40 years, is not straightforward. The proposed transitional arrangements on judicial cooperation in civil and commercial matters, suggested by the EU Commission Task Force,9 are very sensible but highlight the practical difficulties and complexities of disengagement.


Although the European Union is not a fully functioning federal state, its role in world organisations such as the OECD and the Financial Action Task Force (FATF) over money laundering and fraud or the Hague Conference over private international law, and in negotiating with world powers such as the United States in relation to matters such as the Foreign Account Tax Compliance Act (FATCA), should not be underestimated.

The European Union data protection laws appear to be what forced the United States into its FATCA Model 1 agreements with Member States.10 The European Commission played a significant role in those negotiations. However, while the Commission hoped to introduce a European FATCA, this was not politically acceptable in all Member States. The former Savings Tax Directive is now dead and is likely to be repealed.

In parallel, however, the OECD developed its Common Reporting Standard (CRS), which seems to have been accepted by the European Union as the model for automatic tax information exchange and brought to an end further changes to the Savings Tax Directive. There seems to be, however, no realistic prospect of the US abandoning FATCA in favour of the CRS at the moment.

The European Union continues to revise its Directive on Administrative Co-operation (DAC). Council Directive 2011/16/EU established procedures for better cooperation between tax administrations in the European Union – such as exchanges of information on request – was amended in 2014 by Council Directive 2014/107/EU, which extended the cooperation between tax authorities to automatic exchanges of financial account information and in effect incorporated CRS in the EU Council Directive 2018/822 of 25 May 2018, which controversially regulates financial intermediaries such as banks, lawyers and accountants in cross-border structures that may avoid tax.11

Money laundering directives were originally introduced to counter terrorist activity. Tax evasion and 'abusive' tax avoidance are now increasingly in the sights. The proposals for registers of beneficial interests in companies inevitably led to strong calls from Parliament for registers for trusts and beneficial interests. The Fourth Anti-Money Laundering Directive (EU) 2015/849, came into force on 26 June 2015 and should have been implemented in each Member State by 26 June 2017. Article 31 imposes different obligations on the trustees of express trusts to the obligations imposed in relation to beneficial ownership information required for legal entities under Article 30.

The Panama Papers and other calls from NGOs resulted in the Commission and Parliament very quickly revisiting the effectiveness of the Fourth Anti-Money Laundering Directive. The ever-increasing demand, particularly from journalists and various NGOs, for public registers of beneficial ownership in relation to all structures in all jurisdictions has clearly influenced EU institutions. The Fifth Anti-Money Laundering Directive (EU) 2018/843 was enacted into law on 9 July 2018,12 and is to be implemented in each Member State by 10 January 2020. It extends the reporting obligations, but leaves it to Member States to decide how public the registers are to be. It is likely that the United Kingdom will implement it in part, if not in full. The EU Parliament Report from the Committee on the Panama Papers inevitably called for full open registers and focus on financial intermediaries. Since 1 March 2018, this has now metamorphised into the special committee on financial crimes, tax evasion and tax avoidance (TAX3).13

Since Henry VIII's attempt to tax the use, equity has been successful in adapting and evolving to meet the demands modern society placed on it. Equity's success is perhaps now under attack, particularly from the civil law world and civil society that sees it as a hindrance against corruption and tax fairness. It will be interesting to see how equity develops in response. Whether the United Kingdom will pull back from some EU developments when it leaves the European Union is yet to be seen.

Practitioners therefore face continuing change, multiple registration and compliance obligations and public pressure for transparency, all of which will push up the costs of practice.


It is in the area of succession law that the EU demonstrates its particular complexities. The substantive laws in Member States vary considerably in all areas. Individual forms of wills and succession agreements vary, as do the rules on forced heirship and reserved portions. Clawback or obligations to restore in states such as Italy last for the full lifetime of a donor and are enforceable rights in rem, while in Germany they are monetary claims and diminish by 10 per cent per annum and disappear after 10 years. Sweden and Austria have models of administration, while in France and Spain assets vest directly in the family heirs who can then be personally liable for the deceased's debts even if greater than the value of the deceased's assets. In addition, the private international law or conflicts of law rules (PIL) also varied considerably. Some Member States used connecting factors of habitual residence, while others used those of domicile. The majority used that of nationality.

While the EU has not sought to affect Member States' internal substantive law, it has for many years been seeking to harmonise Member States' PIL in this area. The Succession Regulation (EU) No. 650/2012 finally entered into force and became fully effective in all Member States (other than Denmark, Ireland and the United Kingdom) (the SR Zone) on 17 August 2015. In the SR Zone, the universal connecting factor is now that of habitual residence and the SR Zone Member State of habitual residence has universal jurisdiction. Renvoi has been abolished unless it is sending back into the SR Zone or to a third state that accepts such a renvoi. A choice of national law (with no renvoi) is also permitted and a choice made prior to 2015 is still effective. Wills and succession agreements are now accepted throughout the SR Zone. The Succession Regulation also created the European certificate of succession (ECS) for use throughout the SR Zone. Recognition of the ECS, decisions of the Member State with jurisdiction and of clawback or obligations to restore throughout the SR Zone havechanged the landscape for estate planning worldwide, not only in relation to SR Zone nationals and residents, but also in relation to SR Zone situated assets for all individuals. The case of Winkler v Shamoon [2016] EWHC 217 (Ch) is an example in England and Wales of the effect that the Succession Regulation has had on other areas of law. For the purposes of Brussels I, 'Succession' has been interpreted extremely widely and included oral proprietary estoppel as a matter for the Succession Regulation and therefore outside the scope of other regulations. When the United Kingdom leaves the European Union, its relationship with the Succession Regulation will remain unchanged and it will continue to apply the Succession Regulation in accordance with its own private international law rules. The CJEU has begun to rule on various aspects of the Succession Regulation.14

Similar issues also affect matrimonial property and matrimonial property regimes. The European Union has an even more complex patchwork quilt of substantive laws than of PIL. Regimes vary from full community in the Netherlands (until it was amended on 1 January 2018 for marriages after that date), to limited community in other Member States and to marital gains in Germany. PIL is governed by the 1978 Hague Convention in France, Luxembourg and the Netherlands. In other Member States, connecting factors can vary from that of nationality or residence and changes in these during a marriage sometimes do and sometimes do not produce a change, whether retroactive or not. France and Germany have agreed a new form of matrimonial regime that can be used in both countries. Again, the European Union did not propose to amend Member States' substantive law but wished to legislate in order to harmonise Member States' PIL. Rome IVa deals with the property effects of marriage and Rome IVb with the property regimes for registered partnerships. Owing to the significant differences in the recognition of same-sex relationships throughout the European Union, there was strong political opposition. The Visegrád Four of Hungary, Poland, Slovakia and the Czech Republic have become increasingly more vocal and some of its members vetoed (as a family matter it required unanimous support) both Rome IVa and Rome IVb. In record time, the European Union put in their place both of the Regulations under the enhanced co-operation mechanism so that they have been adopted by all EU Member States (other than Croatia, Cyprus, Denmark, Hungary, Ireland, Latvia, Lithuania, Poland, Slovakia and the United Kingdom) and will be fully effective from 2019. Rome IVa deals with the property rights of all married couples, whether opposite-sex or same-sex and similarly Rome IVb deals with the property effects of all registered partnerships, whether opposite-sex or same-sex.

Although many practitioners consider that the issues involved in matrimonial property regimes do not concern them if the domestic law of their particular state does not use the concept, the England and Wales case of Slutsker v. Haron Investments Ltd15 is an example of PIL bringing such matters into play. They will continue to be of vital importance for international couples.

While the International Commission on Civil Status16 (ICCS/CIEC) has made proposals for a convention dealing with the recognition of registered partnerships, this has met with little support in the EU and the future of the ICCS seems less assured. The diversity of arrangements for the registration of marriage for same-sex couples, and for registered partnerships for same-sex and opposite-sex couples and for the recognition of such marriages and registered partnerships, cause considerable conflict.

In many Member States, such as Belgium, France, the Netherlands, Portugal, Spain and Sweden, marriage is available to both opposite-sex and same-sex couples. The Marriage (Same Sex Couples) Act 2013 in England and Wales and the Marriage and Civil Partnership (Scotland) Act 2014 in Scotland recognised same-sex marriage from 2014. Ireland is also to introduce such legislation. The ability to convert a registered partnership to a marriage does create its own PIL problems. There appears to be no indication of any change in the law in Northern Ireland. In many states, one party must be a national or habitually resident in the particular Member State to register a marriage. In other Member States, such as Romania, Latvia and Lithuania, there are protection of marriage laws that make it unlawful for marriage to be other than between a man and a woman. In yet others, such as Austria, the Czech Republic, Finland, Germany, Hungary, Ireland, Italy, Northern Ireland and Slovenia, registered partnerships are permitted. The Netherlands permits both marriages and registered partnerships for either same-sex or opposite-sex couples. The French PACS is a form of registered contract that is available to both same-sex and opposite-sex couples. The changes to the law in Scotland and in England and Wales do not permit opposite-sex registered partnerships. Thus, while Northern Ireland will recognise a same-sex marriage from another jurisdiction as a registered partnership, and Scotland and England and Wales as a marriage, the United Kingdom will not recognise an opposite-sex Dutch-registered partnership or French PACS as either a marriage or a civil partnership. Whether a Scottish, English or Welsh same-sex marriage between a couple where one of whom is domiciled in a state that does not recognise same-sex marriage would be valid in the United Kingdom is uncertain. Adoption and recognition of surrogacy for same-sex couples is not available or recognised in many Member States.

It may be another generation before Member States' substantive laws begin to converge sufficiently to permit some measure of harmonisation. However, Italy has now introduced the concept of a registered partnership. The CJEU decision in Coman,17 which required Romania to accept the rights of a same-sex spouse of a Romanian citizen to live in Romania, even though the marriage was not accepted in Romania, may have far-reaching effects. The impact of the United States' Supreme Court decision in Obergefell v. Hodges18 of 26 June 2015, which required the acceptance of same-sex marriage in the United States, continues to reverberate in the United States and around the world.


As populations live longer, the problems for individuals with diminished mental capacity across borders are also growing. The Hague Convention 35 of 13 January 2000 on the International Protection of Adults (Hague 35) deals with the PIL issues of the recognition and enforcement and the applicable law of protective measures and the applicable law for private mandates. Hague 35 has already been ratified by Austria, the Czech Republic, Estonia, Finland, France, Germany, Monaco, Portugal, Scotland and Switzerland. Cyprus, Greece, Ireland, Italy, Latvia, Luxembourg, the Netherlands and Poland have all signed but not yet ratified. It is anticipated that Latvia may ratify during 2017 and Ireland in 2018. Belgium is also likely to accede shortly and Spain, Sweden and Italy are also now working towards ratification. Northern Ireland may also do so, using a similar model to Schedule 3 of MCA 2005 in Schedule 9 to the Mental Capacity Act (Northern Ireland) 2016. The changes to the internal law in Ireland and Northern Ireland will be significant and Scotland is undertaking a further review.

For England and Wales there is considerable confusion since the Mental Capacity Act 2005 came fully into force on 1 October 2007 and gives full effect to the Convention notwithstanding the fact that England and Wales has not yet ratified.

The EU Parliament passed a further Resolution 2015/20185(INL) on 1 June 201719 and this issue is likely to be on the EU programme during the next five years. Member States will be encouraged to ratify and further EU legislation is possible. Hague 35 is, however, not without its own problems and further developments are likely. The inherent conflicts in the UN Convention on the Rights of Persons with Disabilities (UN CRPD) between the protection of rights under Article 12 and the protection from abuse under Article 16 are probably impossible to square. It is argued that Hague 35 and the legislation of many states bound by UN CRPD are not compatible with it. The debate is one that will continue.


As a result of the lack of EU competence in the area of personal taxation, there are no vehicles to provide structures that are comprehended throughout the EU. Trusts, while recognised in Cyprus, Ireland, Italy (now increasingly less novel), Malta and the United Kingdom, are not recognised in many other Member States for law purposes. The changes to French tax law in 2011 and the EU Anti-Money Laundering Directives have shown a partial acceptance of trusts and other structures for tax purposes, but even so they have not been welcomed. Belgium and Spain have followed France with similar moves. In many Member States, life insurance is given beneficial tax status, while structures such as usufructs or partnerships are also often used.

As mentioned above, Article 31 of the Fourth Anti-Money Laundering Directive, as amended by the Fifth Anti-Money Laundering Directive imposes compliance obligations on trustees of express trusts and other types of legal arrangements. Notwithstanding that access can be limited to those with legitimate interests, pressure for public registers will continue, although now subject to the countervailing pressures of the General Data Protection Regulation (GDPR) 2016/679.20 While seen as problematic, logically, public registers should lead to further acceptance and enforcement of trusts in the long term.


Harmonisation of PIL in the European Union is likely to continue. Free movement of EU nationals, goods, services and capital, although with some restraints, is still seen as an engine for growth, even though the European Union is under pressure to legislate less. The role of the CJEU will also continue to increase, although in response to political trends, it may tend towards protecting national sovereignty against EU encroachment.

All Member States were focused on debt reduction and maximising tax collection. The EU institutions are conscious of the overwhelming priority to maintain the euro as a single currency and to concentrate on economic growth. As a result, the EU institutions are likely to be proactive in encouraging any OECD and FATF initiatives that might be perceived to increase revenue share. The eurozone perspective and priorities are likely to drive those Member States in the eurozone towards ever closer union. Some Member States still consider Anglo-Saxon light-touch regulation as principally to blame for the economic and banking crises developing particularly since 2008. Pressure for increased regulation is likely to continue.

Whether the process of the UK negotiating its exit from the EU will encourage some Member States to review the previous direction of travel for the EU and whether some Member States may themselves be encouraged to become more detached is not yet clear. It is perhaps more likely that the EU will become more homogeneous, focused on civil law and perhaps more protectionist, but the tensions between those Member States inside and outside the eurozone may well deepen.


1 Richard Frimston is a consultant and Christopher Salomons is a senior associate with Russell-Cooke LLP.

3 In, for example, Case C-364/01 Barbier [2003] ECR I–15013 (treatment of immovable property); Case C-513/03 van Hilten-van der Heijden [2006] ECR I–1957 (inheritance tax within 10 years of being resident was permissible); Case C-464/05 Geurts [2007] ECR I–9325 (exemption for Belgian businesses only); Case C-256/06 Jäger [2008] ECR I–123 (reduction for German agricultural property only); Case C-11/07 Eckelkamp [2008] ECR I–6845 (reductions for Belgian residents only); Case C-43/07 Arens-Sikken [2008] ECR I–6887 (provisions for Dutch residents only); Case C-67/08 Block [2009] 2 CMLR 39 (double taxation by Spain and Germany was permissible); Case C-510/08 Mattner [2010] All ER (D) 167 (Apr) (exemptions for German residents only); Case C-133/2013 re Q (restriction of exemption to Dutch land was permissible); and Case C-682/2017 Panayi (taxation of trusts leaving the United Kingdom).

6 Regulation No. 1215/2012 (recast) effective from 10 January 2015, replaced Regulation No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters of 22 December 2000.

10 The starting point for all US FATCA Model 1 Agreements.

14 For example in Kubicka C-218/16, Mahnkopf C-558/16 and the case of Oberle C-20/17.

15 Slutsker v. Haron Investments Ltd [2013] EWCA Civ 430.

17 C-673/16.

18 James Obergefell, et al., Petitioners v. Richard Hodges, Director, Ohio Department of Health, et al. 576 US No.14-556 reinforcing the previous 2013 decision in United States v. Edith Schlain Windsor 570 US No.12-307.