# transferring US stock to UK husband



## sueinwales (Oct 4, 2017)

Maddeningly frustrating to uncover simple information sometimes!

I have some American stock (Merck) gifted to me in the 1990s by my parents. The cost basis is very low so virtually the entire value is considered to be a capital gain. I would now like to divest myself of the stock and invest the capital elsewhere, preferably outside of the USA.

The options seem to be either to sell it or transfer it to my husband. Selling it would involve 3 transactions over 3 years to accomodate the UK capital gains allowance so my preferred option is to transfer the stock to my husband.

Looks like the best way to do this is for my husband to open an account in a brokerage firm here in the UK and for me to transfer the stock into that account. No matter which way i do it, we will still need to obtain a Medallion Stamp (which i only heard of yesterday) which the broker can provide- for £295!!

So here is my specific question- sorry for the prelude....
The value of the stock being transferred exceeds the US gifting limit of $14000, but is still within the allowance for transfer between spouses. I am hoping that transferring the stock to a nominee account at a british brokerage will not trigger US gift tax, but what do you think? 

Any obvious pitfalls i have missed??


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## Bevdeforges (Nov 16, 2007)

Generally speaking, a transfer like this might trigger the need to fill out a gift tax form for the US, but shouldn't involve actually paying any gift tax. 

I had a similar situation when my father gifted me cash at one point. (Long story) Yes, I had to file a gift tax filing for him, but there was no payment of taxes involved. But according to the FAQ on the IRS website, gifts to a spouse are generally not subject to gift tax. https://www.irs.gov/businesses/smal...oyed/frequently-asked-questions-on-gift-taxes


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## JustLurking (Mar 25, 2015)

sueinwales said:


> I would now like to divest myself of the stock and invest the capital elsewhere, preferably outside of the USA.


Make sure that if you are investing in your own name, you use only US domiciled funds or ETFs, or individual stocks. Using the usual UCITS funds and ETFs marketed in the UK will lead to appalling US tax problems (Google 'PFIC' for more).



sueinwales said:


> The options seem to be either to sell it or transfer it to my husband. Selling it would involve 3 transactions over 3 years to accomodate the UK capital gains allowance so my preferred option is to transfer the stock to my husband.


Presumably, selling this yourself would also create a US capital gains tax liability that it is far better to avoid? It seems sensible to transfer these stocks to your husband and then let him drain the proceeds using his annual UK capital gains tax-free allowance, something unavailable to you as a US citizen.



sueinwales said:


> The value of the stock being transferred exceeds the US gifting limit of $14000, but is still within the allowance for transfer between spouses. I am hoping that transferring the stock to a nominee account at a british brokerage will not trigger US gift tax, ...


Have you found this article: https://thunfinancial.com/home/amer...ting-appreciated-assets-non-resident-spouses/

Excerpts:


> *Understanding the Cross-Border Tax Implications*
> ...
> While U.S. citizen couples can gift an unlimited amount between spouses without any estate or income tax consequences, an American with a non-citizen spouse is limited to a special annual gift tax exclusion of $149,000 (2017) for gifts to a non-citizen spouse; gifts in excess of this amount will require the U.S. spouse to report the gift on their federal gift tax return (Form 709) and the “excess” gifting beyond the annual exclusion will reduce the donor-spouse’s remaining lifetime unified credit from transfer taxes (i.e., gift, estate and generation-skipping transfer taxes (GST)). Despite these limitations, interspousal gifting may provide substantial opportunities to lower U.S. income and transfer tax exposure for the mixed nationality couple.
> ...
> ...


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## sueinwales (Oct 4, 2017)

Too much was happening last year for me to follow up on the sale of my stock (worth around $35K so well within spouse gifting limits), but I am determined to get rid of this headache this year for sure!

Have just discovered that I actually have Stock Certificates (I had thought everything was now electronic) and from various things i have read it looks like i will have to physically send these into Wells Fargo Stockholder Services (?) What's the best way to do this?

And i still have to figure out the medallion stamp, which is a real pain.

Also, the address listed on the Certificates is my previous address. We retired and moved house (husband is a vicar, so we had to return the house when he finished!) in 2015. Will this complicate things??


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## 255 (Sep 8, 2018)

sueinwales -- I would recommend contacting Merck & Co. investors relations directly ([email protected]) and then utilize Merck's Transfer Agent: 

Merck Shareowner Services
EQ Shareowner Services
1110 Centre Pointe Curve
Suite 101
Mendota Heights, MN, USA 55120-4100

to liquidate your shares. Either should provide the requirements to settle your account for you. Stock certificates can be endorsed, much like a check, to transfer. All Merck shares ultimately go through their transfer agent and they also operate a "Dividend Reinvestment Plan." Of course, you could always go through Wells Fargo -- but expect a hefty commission (they are, of course, only a middle-man.) In any event, please get instructions from Merck or Wells Fargo on their specific procedures and send any endorsed certificates by certified mail or courier. Your address shouldn't be an issue, but you may have to change your address with Merck first. Cheers, 255


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## sueinwales (Oct 4, 2017)

Thanks for the info.
Contacted merck shareholder services and they were very helpful. Explained that i was having trouble obtaining a medallion stamp, and they said that they were also recommending a new service, called e signature guarantee, at www.esignatureguarantee.com The premise here is that you upload the identity documents (passport etc) and the stock transfer form and they then get it all authorised. Smaller fee of $149 (vs £295). Still thinking about this one. I did start this process and was stymied at the first hurdle. To open an account, the form requires you to identify which US state you reside in, so i contacted them, and they said this would not be a problem. I guess it never occurred to them that an american citizen would not live in an American state. No surprises there.

Merck shareholder services strongly advised against endorsing the back of the stock certificates and advised me to mail them in to Merck along with the stock transfer form with the Medallion Stamp/Esignature guarantee. I do worry about what happens if the certificates are lost in the post.....

The brokerage firm i spoke withsome time ago is Redmayne- anyone heard of them? Are they reputable?

I have also been in contact with another firm called IWC Estate Planning, who are offering to handle the medallion stamp, and deal with the certificates and sale of the stock, for £720. It is very hard to know what an appropriate fee should be. 

So while i do feel i am making progress it is a slow job.

On a more positive note, i became a British Citizen on Tuesday, so am now a dual national. Having lived here for 38 years, it was time. Also, a little voice inside me keeps whispering 'renounce, renounce'. Time will tell.


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## 255 (Sep 8, 2018)

sueinwales -- Congratulations on your new citizenship! I recommed you do as Merck suggests; just follow their instructions. Please make copies of everything before you mail it. Merck should also be able to give you instructions on how to replace lost stock certificates (it's not that uncommon) in the unlikely event they are lost in the mail. Usually, you'd have to fill out a form requesting replacement and provide an affidavit and/or police report descibing how it was lost, along with an indemnity bond to protect Merck if the certificates subsequently turn up and someone else cashes them out. Additionally, if you have to contact Merck for a replacement certificate, ask them to put a stop-transfer order on the original certificate to keep it from being transfered to someone else. Heres hoping it doesn't come to all that! Good luck. Cheers, 255


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