A Federal Transfer Certificate

Title Research can assist with the administration of US and Canadian shareholdings 

When assets held in the US form part of a UK estate and the aggregate value of all assets exceed $60,000 at date of death, tax certification from the IRS may be required in the form of a Federal Transfer Certificate – Form 5173,

When dealing with shareholdings specifically, US Transfer Agents (the US equivalent of a UK share registrar) will request either a Federal Transfer Certificate (Form 5173) or an Affidavit of Domicile in support of their standard transfer forms.

An Affidavit of Domicile is an Oath sworn by the Personal Representative’s of the estate that US assets did not exceed $60,000 at death.

There is a tax treaty in place between the US and the UK, which is designed to prevent double-taxation.  On this basis, if a UK deceased was never domiciled in the US or held citizenship there during lifetime but owned US assets upon death, then the treaty is designed to ensure that tax is not accrued both in the US and UK upon death.

If a Federal Transfer Certificate is required, then an application must be made to the IRS to issue one.  Title Research submit these applications regularly and can assist practitioners in the UK with the full process.

The current timescale to obtain tax clearance from the IRS is 2 years and so it is vital to consider whether it may be required as early as possible to avoid future delays to the estate administration.

Note – not all US Financial Institutions will request tax clearance, however, it is a requirement of all US Transfer Agents and many investment management companies.