# Interactive Brokers - Keeping IRA's when account is moved from US to Europe



## Sneetch

A friend of mine is starting to organize things for the move from the US to France when she retires, and one thing she is looking into are the issues people have been having with keeping investment accounts open when they don't have a US address. She is not the type to maintain a US mailing address in order to avoid the issue, so while that is often mentioned as an option when this type of discussion comes up, that is not an option for her.

She has an IRA and a Roth and was thinking of transferring them to Interactive Brokers before the move because she has heard that IB is "expat friendly." However, she also saw that Interactive Brokers will transfer the accounts from the US branch to a European branch (I think in Ireland) when she becomes resident in France and no longer has a US address. 

That made her look at the webpage for Interactive Brokers in the European country and on their list of services she didn't see IRA's listed, so that has her convinced that IB will close her IRA when they transfer it and then turn it into the European country equivalent, meaning that she will pay full tax on the the IRA distribution.

I can't believe that IB would do that, but in all the searching I have done on the web I haven't been able to find anything definitive about how the transfer process works. She tells me that she can't ask them directly because talking to IB advisors is limited to existing clients. 

Does anyone have any experience with Interactive Brokers and having their IRA's shifted from being US based to being European based ?


----------



## Bevdeforges

Sneetch said:


> so that has her convinced that IB will close her IRA when they transfer it and then turn it into the European country equivalent, meaning that she will pay full tax on the the IRA distribution.


The only issue there is that there aren't (m)any IRA equivalents here in Europe. 

France recognizes a US IRA as a "government pension" - so under the US-France tax treaty she will be taxed only in the US on withdrawals (i.e. not at all on the Roth withdrawals) and granted the tax credit at French rates when declaring her withdrawals on French declarations. Depending on where she currently has her accounts and what she is planning on doing with them after she moves, I would suggest that she hang tight until she moves, and then just file a standard old change of address form with the institution holding her accounts. 

Unless she is planning on doing some serious buying and selling of investments, they may allow her to keep her plans in place as long as she is mainly just taking distributions. (I only suggest that because that is precisely what I am doing right now and haven't heard a peep on the matter from Vanguard. There may well be some company policies she'll have to comply with. In the case of Vanguard, I believe they require a minimum 15% be withheld for Federal income tax if the overseas customer is a US citizen. The standard 30% withholding applies for a non-US citizen not resident in the US taking distributions from their funds. You do have to take the distributions to a US bank (like the US $ account in Wise). They will make direct deposits/wire transfers to foreign banks, but all those apparently require a 30% withholding.


----------



## Sneetch

Thanks for the prompt reply Bev. Oddly enough my friend presently has an account with Vanguard, and when she asked them about keeping it when she moves to France and no longer has a US address they point blank told her that she could not. That's what set her off on the chase for a company that will let her keep her accounts. 

The next thing to make sure of is that the account stays open as a tax deferred account for the purposed of US taxes (both IRA and Roth) when it is no longer domiciled in the US. She doesn't want to be hit with a tax bill for the full distribution of an IRA, nor loss the protection that a Roth provides against capital gains tax if it ends up in a regular brokerage account.

The question really is if existing IRA and Roth accounts can be kept as such even if their domicile is changed from the US to a European country.


----------



## Bevdeforges

Sneetch said:


> The question really is if existing IRA and Roth accounts can be kept as such even if their domicile is changed from the US to a European country.


All I know is that the "domicile" of my IRA account hasn't changed. It's still with Vanguard in the US. I changed my address with them probably nearly 30 years ago now and just let whatever was in there sit tight until I hit the "magic age" to start taking distributions. Which I have been doing for about 5 years now. I guess ignorance really is bliss - I just keep on keeping on as I have been doing for ages now and no one has said anything about closing out my account.


----------



## TomMM

Sneetch said:


> Thanks for the prompt reply Bev. Oddly enough my friend presently has an account with Vanguard, and when she asked them about keeping it when she moves to France and no longer has a US address they point blank told her that she could not. That's what set her off on the chase for a company that will let her keep her accounts.


I am working through this right now with my IRA, 401k and other investment accounts. The easiest solution I’ve found is to use a mail service that provides a US mailing address. These services also are able to forward mail to a foreign address if needed.


----------

