Broker to accept gift of shares (NYSE) between family members


I'm new to the board so apologies in advance ......

I’m struggling to find a method of transferring some shares in a company traded on the NYSE from one family member to another.

I cannot find a broker who will accept this transfer.

I’ve done all the research from the taxation point of view and am 100% satisfied that what I propose is correct. I’ve taken advice from the relevant InlandRevenue bodies in both the countries involved and all is OK – it’s a well used tax loophole regarding stock options in France which has now been closed, but still exists for stock options attributed before 2007. The gift is from me (French tax resident) to my father who is UK tax resident.

The shares are currently held by Fidelity brokers in the US and are the result of exercised stock options which were attributed before 2007. Under French tax law, I can gift up to approx. 100k euro of this stock (calculated at FMV) to each immediate family member, and I will have no tax liability as I have not sold the shares and thus have not “realised” a profit.

My father can receive the gift in the UK, and the cost basis for CGT will be the price on the day the gift was made. So, if the stock is sold immediately, there will be no tax liability for him. Of course, the gift must be a true gift, and no money or benefit can be returned to me.

As I would be paying approximately 60% tax on the profit in France, I prefer to gift to my father with 0% overall tax, and allow him to enjoy his retirement, in return for everything he's given me over my lifetime.

My big problem is that every broker I have contacted say that they will not accept a transfer of stock from one name to another.

Any suggestions / comments ?

Bonne fete


  • JohnRo
    JohnRo Forumite Posts: 2,887
    Tenth Anniversary 1,000 Posts Combo Breaker
    I've transferred investments, in specie, from one family member account to another held with Charles Stanley Direct without any difficulties or delays.

    It required a written authorisation letter with specific instructions stating the assets are being gifted.

    They were however all UK based, both family and investments, so I don't know whether there would be any caveats that bar CSD being able to do the same for you and your father or whethetr these investments can be transferred to them.

    Sorry if this doesn't help.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
  • SleepApnea
    SleepApnea Forumite Posts: 4 Newbie
    edited 31 December 2014 at 2:00PM

    Thanks very much.

    Just checked the CSD site, and I'm not sure they handle trading on non-UK markets.

    Will investigate further and leave an update ....

  • Thrugelmir
    Thrugelmir Forumite Posts: 89,546
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    SleepApnea wrote: »

    My father can receive the gift in the UK, and the cost basis for CGT will be the price on the day the gift was made. So, if the stock is sold immediately, there will be no tax liability for him.

    If only it were that simple. The cost base is zero. If were that simple tax avoidance would be seamless. Transferring assets at under value was outlawed many moons ago. Probably explains why no one wishes to be party to the transaction, that along with your non UK residency.
  • SleepApnea
    SleepApnea Forumite Posts: 4 Newbie
    Gifting of exercised stock option within the allowable gift limit laws is/was a reasonably well documented tax avoidance method in France. Which is why the government have now closed the possibility :( .... although it's still applicable to options granted before 2007:) Even in that case, it's not unlimited, only approx 100k euro per directly linked family member every 15 years.

    I did contact the UK Inland Revenue, and they confirmed that as the donator of the gift (me) has satisfied the tax authorities in the country of origin on disposal, there would be no CGT in UK if the share were sold immediately.

    After reading your response, I think I should write to the UK Inland Revenue with precise details of the proposed gift and get a written confirmed decision.

    The actual problem I'm getting with finding a broker to accept a transfer of stock between two names is happening before I even go into the detail of the two tax jurisdictions, specific French gift law and French stock option fiscality etc ......

    I sense a long battle ahead .....
  • SleepApnea
    SleepApnea Forumite Posts: 4 Newbie
    I spoke to a Revenue CGT technical advisor this morning who confirmed that any gift coming from outside the UK would be given the cost basis of the full market value of the shares on receipt. So, if the shares were sold immediately on receipt of the gift, there would be no UK CGT liability to my father.

    I would have the tax liability in my country of donation .... which is negated by the French family gift law for stock option attributed before 2007.

    This confirms what I have been told verbally on two other occasions by the Revenue, but I think it may be prudent to get a written reply from the UK Revenue for safety's sake.

    Now, it's back to find a broker who will accept the position transfer between names .......

    Any recommendations of brokers who can accept position transfers between different names would still be welcome :)

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