Inherited IRAs -- Getting LOTS of conflicting advice. Please help :)

Hi,  i am a long time lurker.   I am a dual citizen---  originally from the USA but married, moved to the UK and became a dual national in 1991.   Have earned and payed taxes in the UK and have file yearly taxes and bars (quite a simple position until this year)    Husband is a UK citizen only.    i have a USA checking account, as my son is studying there, and have maintained that since 1991.    it is my only USA account until now. 

I have lost both of my parents in the past 90 days and I am no the beneficiary of an inherited Trad IRA.        (USA citizen brother aswell)
I was getting to grips with RMDs etc and have unskilled myself a lot, getting a UK tax accountant in prep for a more complex tax position.   My intent was to keep the accounts in the USA, draw down over my lifetime RMDs in accordance with whatever my new tax guys suggests is optimal.

HOWEVER, today, UBS where the account is held, has said that their regulator committee has said that I have 90 days to move the account, or liquidate it fully and take the tax hit.   What the heck? They suggested I talk to to UBS in London to see if they would accept a transfer on the accounts...   

Clearly, as it is Boxing day, I can't call them.  but everytime I read something about equities it seems to generate a variety of answers.   Has anyone here ever heard of a bank saying that they will only hold the account for 90 days? 

Is it worth approaching other USA outfits, i.e. Fidelity, to see if they would accept the account?
Am i really going to have to accept liquidating and a HUGE tax bill?

Any thoughts, would be welcome.   I will clearly call UBS london tomorrow... but I am not convinced I'll get a straight answer.

A bit knocked for six on this, on top of the other stresses of grief, family and xmas!

Thanks for the advice.... 

Condolences on your loss. 

My first thought would be to ask your own US bank if they  do IRAs.

We use Vanguard for our IRAs, we are both dual US/UK citizens.  Before our son moved back to England in 2017 we got him to open up an IRA with Vanguard for 2 reasons, to roll his company 401k into, and also to receive the IRAs he will likely inherit from us. I don’t know if Vanguard will accept new accounts from citizens residing overseas but they have certainly provided excellent service to us but we did have accounts with them before we moved to England.  Given that you still have a US bank account you may like to give them a call. My wife rolled her IRA to them the year we moved back and they made the rollover very easy to do.

Thanks.  I'll see if they will... my brother was going to go to his provider.  Good forethought with your son!

@durhamlad    I had previously used my parents address as my usa address.  Now we are selling the house, I will lose that.   Is it possible for me to use my brothers address ?   Or are there any other implications on that?   

@durhamlad    I had previously used my parents address as my usa address.  Now we are selling the house, I will lose that.   Is it possible for me to use my brothers address ?   Or are there any other implications on that?   

We use our daughter’s address as our correspondence address for our US bank, and for our Vanguard accounts. (They both know we reside overseas )

Really sorry to hear about the sudden and sad bereavements. All my sympathy.

If you want to keep the IRAs in the States there are several UK based financial advisers who are SEC & FCA regulated who could manage it for you.  However, the account balances would have to be meaningful for them to be interested. From a tax perspective if you take a complete one-time distribution you will only pay tax in the States - if you take RMDs you'll owe tax at UK rates. UK tax rates may be higher than US rates. 

@guya   thank you.  I considered myself pretty competent on money until this.   Coupled with all the shocks it has rocked me.  I hate feeling stupid and complicating things for my young adult kids.  I do have a newly appointed tax guy now in London, which hopefully will at least de stress me. 

@guya my portfolio is roughly a million us, so just falling short of uk wealth managers thresholds for interest.  I have contacted usb wealth management as the beneficiary accounts are with them.  Won’t know till Jan.  I am coming around to the idea of just taking the one time distribution.   Basic question....  is this distribution treated as income, thereby putting me into the 36% tax bracket or as some sort of capital gains that invokes a different %?   I have always filed basic 2555 ez returns so am ignorant

As Guya states, taking the IRA as a lump sum it will only be taxed in the USA and it will be treated as regular income. It the IRA has no non-deductible contributions in it then 100% of the distribution(s) are fully taxable as regular income.  These non-deductible sums make up the "basis" of the IRA so whatever you decide to do with the IRAs you need to check that basis.  If your parents were over age 70 then for sure they will have been taking distributions from their IRAs so if you look at their last tax return then if the IRAs had a basis there should be a form 8606 with the return which shows that basis. If there has been an IRA distribution and no 8606 filed then rest assured that 100% of the IRA is subject to tax.

If you can keep the IRAs in the USA then you can, each year, convert a lump sum into a Roth. The lump sum is taxable only in the US. Roth distributions are tax free in both countries.  This year I have just completed my last lump sum conversion so I now only have a Roth. Still working on lump sum conversions for my wife's IRA, which has a basis of ~$30k.

Hi,
Sorry to hear about the death of your parents.  I was in a very similar position 2 years ago just before Christmas, which doesn't make handling these things any easier.  There is a financial advisor in London who has helped me manage the inherited IRA's.  They are called London and Capital. 

@jillrosenbaum    Thank you for an actual name!   And yes, the holidays have been challenging

Hi Tinag,

Firstly, my sympathy for your bereavement. I’ve been there too. It sucks.

Regarding the finances, you might try Thun Financial for guidance. They are based in the US but specialise in expat portfolios and have been a massive help to me. For accountants, I use UKUS Tax services. UK based but well versed in both US and UK tax and they do both my US and UK returns. Both firms have been a help with RMDs, bank and portfolio accounts, what addresses to use, etc. As you are a dual-citizen, there are probably variations from what I’ve had to do, since I’m still on the first spouse visa and therefore non-domiciled in UK. Thun takes a management fee as they are financial advisors.

Best wishes for a Happy New Year,

Sundance

Thanks @sundance.  Then are on my shortlist as my son is in Madison. 

I have managed to connect with a tax guy and Tanager wealth, who seem up to speed in this and can find someone to take the iras without cashing out.  I hopefully caught this all in time. 

I have made a few a small mistakes (shares isa etc) but it will work out.  As someone on a thread said,  I prob won’t pay a lot of tax but I will Have to spend some money to sort it out.  i Just have to bite the bullet and get my 22 and 20 year old sorted at the same time so we aren’t in the same place in 10 years.      Who knew that Uncle Sam would want a bit of my house etc. 

Hi, just wondering if you managed to sort this problem out and were you able to work with someone at Tanager?

Yes, Tanager were brilliant.  Reviewed everything across the family.  Moved the USA stuff, set the kids up, dispersed what I wanted and now have 4 of us as clients.   Tax efficient aswell.  Worth every penny, as I very nearly just cashed up and took the consequences.  They also sorted out the other things that had bigger usa tax implications like paying off our mortgage that I was unaware of.  So, met with them literally just before Xmas and sorted by March.