[Note: I've posted the
same question to BogleHead's Non-US investing forum. If you frequent both, sorry for the duplication
]
I (UK/US dual citizen, living in the US) am trying to gift my brother (UK citizen, living in the UK) some household name US stock I hold. I'm wondering if anyone has done this and can provide insight into their experience. In particular, what UK brokerage they transferred the stocks to (and were they any good!).
Failing that, here's the specific issue I'm running into:
I was told by Fidelity US that a direct transfer of shares from myself to my brother was not possible, and that the work around is:
- Create a joint account with my brother at Fidelity US (not difficult - seems the IRS is happy as long as there's someone with an SSN first on the account
- I transfer the shares from my US brokerage account into the joint US account
- My brother transfers the shares from the joint US account to his UK brokerage account
[Works because the person doing each transfer is named on both accounts.]
My brother doesn't have a UK account yet, so we needed to set him up with one. When talking to the Fidelity US adviser, I suggested Fidelity UK. The adviser said it didn't have to be Fidelity UK, and wanted to make clear Fidelity US and UK are completely separate companies, and the conversation moved on to him needing register a W8-BEN with his new UK account.
Thing is, when my brother went to set up an account with Fidelity UK, they told him they only trade in UK markets and he can't buy / sell / hold US stocks with them. I couldn't believe that at first, but have since independently verified.
This has understandably damaged my brother's trust in my guidance (and by proxy, to the related tax advice I passed on from my UK/US tax accountant (we're doing the 'UK-US gift stock rather than cash to avoid capital gains' thing)) so I'm hoping someone on this group has experience of transferring/gifting stock internationally, or at least can recommend a UK broker that isn't gong to make me look stupid in round #2
FYI, my brother's been talking to Hargreaves Lansdown (biggest broker in the UK, expensive, good customer service, I've never heard of them).
He says they say an intermediate service is required, but then the acronym soup started and I'm not sure enough of what they said to him to want to repeat it here 3rd hand. Any idea what this may be about?[12/3 Update]
I waited up til midnight my time and called Hargreaves Lansdown (HL) myself when their lines opened at 8am. The intermediate service was just them describing the usual DTCC/ACATS stuff and not actually a concern, so I've crossed it out above.
However, HL also confirmed they won't allow step 3. Specifically, they'll only accept an external transfer from an account that has the same holders on it - i.e. individual-to-individual or joint-to-joint, not joint-to-individual. I asked if that was a legal restriction or a HL thing. It's a HL thing, so I tried iWeb, but they have the same restriction. I'd try Interactive Brokers, but their whole approach is no support so I can't just phone someone up and ask.
So I've gone back to my UK/US tax guy to find out if this change matters. It doesn't change my overall post though (asking for other's experiences and what UK broker they used), so I've left it up.
