Transferring Shares to my Spouse

iwaddo77

It seems sensible to transfer some of my shares to my spouse so we can sell them and each receive our own CGT allowance.

My question is about how to transfer them.  They are current held by Morgan Stanley in the US, they trade on the NYSE.

Do I need to actually need to 'transfer' the shares anywhere or can I just document that I'm transferring 50% to my spouse?

If I have to transfer them where would I transfer them to? A broker in the US or can I use a UK broker.  We currently do not get any charges for holding the shares just a small commission for the sell and funds transfer to the UK.

Thank you for your help. 

TheGreenFrog

In theory and from UK perspective only, you can document transfer of beneficial ownership from you to your spouse for zero consideration and then ensure that dividends, sale proceeds etc are transferred to them.  I don't know the implications from US perspective and in any event if you adopt that route best to do so just before sale so it is a very short term arrangement.

UncleK

I have transferred shares held by X-O from me to my wife. There was an £18 transfer fee. She pays a lower rate of income tax and CGT than me, so that made sense from a dividend and eventual sale PoV. I reckon that is necessary from an HMRC perspective.
If it was me, I would first ask Morgan Stanley if I can transfer half into my wife's name. I suspect you may well have to sell them on the NYSE anyway.

TheGreenFrog

UncleK said:

I have transferred shares held by X-O from me to my wife. There was an £18 transfer fee. She pays a lower rate of income tax and CGT than me, so that made sense from a dividend and eventual sale PoV. I reckon that is necessary from an HMRC perspective.
If it was me, I would first ask Morgan Stanley if I can transfer half into my wife's name. I suspect you may well have to sell them on the NYSE anyway.

(my highlight in bold)
HMRC has to respect beneficial ownership.  Whether you want the hassle of HMRC raising a query and then having to prove transfer of beneficial ownership is a different matter, so if you can transfer registration easily then that is best course.

iwaddo77

So I've established that I can just document the transfer but do not need to share this transfer with the HMRC. My key question is whether or not I have to physically transfer the shares or can I continue to hold them on behalf of my spouse. I am waiting for a callback from the HMRC CGT technical team.

TheGreenFrog

iwaddo77 said:

So I've established that I can just document the transfer but do not need to share this transfer with the HMRC. My key question is whether or not I have to physically transfer the shares or can I continue to hold them on behalf of my spouse. I am waiting for a callback from the HMRC CGT technical team.

If you transfer the beneficial ownership to your spouse then you don't have to transfer the registration.  https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg10720

iwaddo77

Perfect thank you.

tonywick

Hi - I realise it's quite a while since this thread was originally active, but I'm just wondering how successful this turned out to be for the OP. I'm in a similar position, having a number of US-based IBM shares that I accumulated initially through an ESPP and then from re-investing dividends. I can manage them ok through the existing broker (Computershare), but I think there may be advantages to managing them through a UK brokerage - one of which would be the transferring of them to a joint account here with my wife to double the CGT allowance in the event of sales. Also, as I'm getting longer in the tooth I feel my dependents would have an easier time dealing with someone in the UK, as the alternative can be a pain at times. Redmayne Bentley is one firm that has been suggested who do such transfers - has anyone experience of them?

iwaddo77

Hi, I left my shares that trade on the NYSE and are managed by the US based brokerage exactly where they are, there was no advantage in transferring them to a UK brokerage. In fact they may well have been costs to transfer them, they indicated the only way I could transfer them was to sell them and buy them back which sounded like a risk and a headache as I would have be liable for any gain.

I spoke to the HMRC, they confirmed this was ok and there was nothing else to do. My shares are still all in my name with the US based brokerage but I did gift 50% to my spouse for the purpose of CGT. I did write to my financial adviser who made a note on their records. Now in our reviews and on their portal it shows we both have shares, 50% each.

Please let me know if I can help further

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81877223#Comment_81877223

You are to be congratulated for forward planning the ease of dealing with a foreign registered investment not only in a scenario where your own faculties may be begin to wane, but also the hassle you leave behind for your spouse and executors if you leave things as they are.

Assuming your shares are non certificated ( ie digital) you should check with Computershare whether you can access a downloadable US stock transfer form to facilitate transfer to your chosen UK investment custodian or platform.

From what I understand you would be making an in specie transfer of the holding ( not a sale) using the Depository Trust Company ( DTC) Direct Registration Profile system to effect a transfer to your chosen UK broker.

Important to note you are initiating this process direct with Computershare with the UK broker waiting to 'catch the ball' at the end of the process.

Since Computershare and you are doing all the hard work, you are not limited in choice of broker to a specialist Stockbroker like Redmayne Bentley. If you are happy to manage the joint investment yourself both HL and ii DIY platforms offer joint general investment accounts ( not many platforms do).

However if your investment is in certificated form this will require a UK broker with Medallion Signature Guarantee certification status to handle paper shareholdings. This is where the likes of firms like Redmayne Bentley ( at a cost) come into the picture - the popular DIY platforms aren't qualified to do this - see below recent thread -

https://forums.moneysavingexpert.com/discussion/comment/81852884#Comment_81852884

cunningjames

https://forums.moneysavingexpert.com/discussion/comment/81877269#Comment_81877269

how exactly did you gift 50%. When you say “financial advisor”, is this the person you deal with at the US based broker who hold your shares for you, e.g. Morgan Stanley. If so, you’re saying that as long as there is a note on your account that the beneficiary of 50% of all shares are your spouse, then job done? Seems too simple, so do you have anything to substantiate that HMRC won’t challenge this in the future? Perhaps I need something in writing from HMRC to say the same. Thanks