By Anthony Allsopp, Head of Business at Title Research
We've been dealing with US assets held in UK estate for nearly 20 years and assisting Personal Representatives to navigate their various challenges, and we've noticed an increasing trend in this area.
It is quite common knowledge that Cadbury was bought by Kraft many years ago and what transpired was a shift in ownership away from shares held in the UK toward shares held in the US. We have assisted many estates over the years, that held holdings in Keurig Dr Pepper, Kraft Heinz (and Kraft Food before this) as well as Mondelez International. These holdings were often a result of the deceased having held shares in Cadbury during their lifetime – likely due to lifetime investments or as part of previous employment.
We still take instruction to administer these types of holdings but far less than we used to. The trend has switched to other and more varied companies as well as holdings held via investment companies in the US, which present their own unique challenges.
An upward trend in US assets
Although shares resulting from the Cadbury sale could be considered a micro-trend, we are seeing an upward trend in US assets - but why might that be? There are several potential reasons.:
- People passing away today are more likely to own investments than previous generations. There used to be barriers to investment, such as a lack of insights and knowledge; however in the modern world, it is reasonably straightforward to make investments, both domestically and overseas.
- People today are more geographically mobile and as a result, can easily seek employment outside of the UK and because of it acquire interests in international businesses where they've been employed.
- An increasing trend of US businesses operating in the UK has resulted in UK-based employees gaining stock options from their employment – Apple, Amazon, and Microsoft are examples.
Delisting from the London Stock Exchange
In addition, it has been reported recently, that there is a growing trend of UK businesses delisting from the London Stock Exchange and relocating to the New York equivalent. It is perceived that moving company registrations in this way has potential benefits to UK businesses and it remains to be seen whether the trend continues.
At Title Research we have dealt with a company that had moved registration during administration. In this example, the company was registered in Jersey when the deceased passed away and due to the value of the holding, it was required to obtain a Grant of Probate there. Over the course of the administration, the company delisted and changed its registration to the US, causing significant delays.
Conclusion
Yes, the trend of US-held assets forming part of UK estates is on the rise.
As such, estate administrators should be aware of the challenges involved in encashing these types of assets early on so that they can be mitigated as best as possible.
Common challenges include the Tax Treaty in place between the US and the UK, and the resulting requirements of US Financial Institutions. This means dealing with UK probate matters as well as escheatment, a process whereby an asset can become dormant and pass to state ownership.
Some of these challenges are quite complex and we will discuss them in a series of forthcoming articles. For any advice on ongoing matters in the interim, please 'Get in touch' with us.
If you missed it, it is not too late to get your copy of the Spring 2024 Entitlement edition. Download here.
.png?width=600&height=150&name=Entitlement%20CTAs%20(2).png)
Topics: Contingency Fees, Beneficiaries, Estate, North America, Estate administration
