Berkshire Hathaway

[CliffEdge]

Time to stock up?

[Dod101]

Time to stock up?

The question could be applied to many shares at the moment. I would give it another month or two.

Dod

[DrFfybes]

I bought quite a few just before Russia invaded. Oddly they increased 10% in about 10 days. I did consider cashing in and banking the profits to pay for the new central heating, but didn't. Hindsight is wonderful, but in a very uncertain Global situation any Company at an all time high was probably a strong 'sell' signal

Sadly they dropped about 15% from the peak, and I wouldn't be surprised to see them drop another 10%. I will stock up, but only if/when they dip under $250.

ISTR there is a US$60k limit for UK residents/nationals above which you are liable to US Estate tax if you die suddenly.

[Lootman]

ISTR there is a US$60k limit for UK residents/nationals above which you are liable to US Estate tax if you die suddenly.

There was a TLF topic about this recently. I cannot see it right now but the essence was that this can be a problem if you have a certificated holding and are therefore on the US share register.

If however it is in a nominee holding then the executor simply sells as if he were the holder, and the issue doesn't arise.

As for BRK, I hold 100 of the B shares and I have never seen it as a trading or market timing play. It is the ultimate buy and hold forever share

[CliffEdge]

ISTR there is a US$60k limit for UK residents/nationals above which you are liable to US Estate tax if you die suddenly.

There was a TLF topic about this recently. I cannot see it right now but the essence was that this can be a problem if you have a certificated holding and are therefore on the US share register.

If however it is in a nominee holding then the executor simply sells as if he were the holder, and the issue doesn't arise.

As for BRK, I hold 100 of the B shares and I have never seen it as a trading or market timing play. It is the ultimate buy and hold forever share

Even in a once in a lifetime opportunity to buy?

[Dod101]

ISTR there is a US$60k limit for UK residents/nationals above which you are liable to US Estate tax if you die suddenly.

If you take your time about dying is there no US Estate tax?

Dod

[scrumpyjack]

I see Warren has just given to charity another $4 billion of BH shares, so he is now down to his last $96 billion.
https://www.bloomberg.com/news/articles ... f=mwlrlP7l

[SalvorHardin]

ISTR there is a US$60k limit for UK residents/nationals above which you are liable to US Estate tax if you die suddenly.

There was a TLF topic about this recently. I cannot see it right now but the essence was that this can be a problem if you have a certificated holding and are therefore on the US share register.

If however it is in a nominee holding then the executor simply sells as if he were the holder, and the issue doesn't arise.

As for BRK, I hold 100 of the B shares and I have never seen it as a trading or market timing play. It is the ultimate buy and hold forever share

Yes it can be an issue if the shares are in your name and the correct forms aren't submitted in time. If the correct forms are completed ISTR that the double taxation treaty gives something like $10 million as an exemption.

Of my American shares only my BRK.B are in my name. Since I'm single (no children) inheritance tax isn't something that bothers me.

In my will these were to go to The Open University, but after they pissed me off a couple of years ago by banning me from taking any more courses, I changed the beneficiary to a United States Marine Corps charity (and cancelled my annual donation to the OU).

I guess that there won't be any IHT charged on these shares!

[DrFfybes]

ISTR there is a US$60k limit for UK residents/nationals above which you are liable to US Estate tax if you die suddenly.

If you take your time about dying is there no US Estate tax?

Dod

Correct, because you get time to sell them

[murraypaul]

There was a pound-quoted Berkshire Hathaway ETF launched recently: https://www.trustnet.com/factsheets/e/w ... racker-etp

Presumably that takes away some of the tax hassles?

However, it is a very small fund, and you are paying a management charge.

[SeagoonN]

I too recall that item but also cannot now find it. I don't recall any mention that shares held in nominee accounts would escape the US IHT so I did some searching and found this on the IRS website:

"U.S.-situated assets that are subject to estate tax include, for example:

Real estate located in the U.S.,
Tangible personal property (excluding some art), and
Stock of corporations organized in or under U.S. law, even if the nonresident held the certificates abroad or registered the certificates in the name of a nominee."

http://www.irs.gov/individuals/international-taxpayers/some-nonresidents-with-us-assets-must-file-estate-tax-returns

It seems clear to me from this that a nominee account will not avoid the tax.

Also, anyone who has completed a W-8BEN form in order to claim reduced US dividend witholding tax (I guess that is most of us) will have their details recorded by the IRS who will therefore know exactly who they are and what US shares they own.

I hope that I am wrong so if anyone knows better please let us all know!

[Lootman]

It seems clear to me from this that a nominee account will not avoid the tax.

Also, anyone who has completed a W-8BEN form in order to claim reduced US dividend witholding tax (I guess that is most of us) will have their details recorded by the IRS who will therefore know exactly who they are and what US shares they own.

I hope that I am wrong so if anyone knows better please let us all know!

A W8-BEN form only contains details about the investor, and not any holdings that he has or may have held in the past. So that alone would not lead to an assessment of tax. For BRK alone there would be no need for a W8-BEN since it does not pay a dividend and therefore no income tax withholding would apply.

Whether there is a theoretical liability is one thing. Whether the typical process of winding down a UK estate would trigger that liability is another. In most cases for nominee holdings, the executor would sell or transfer all positions and there would be no indication to anyone in the US that the shareholder had died, so the issue itself would not arise. It may be more messy for direct holdings as mentioned before.

And I would assume that to the extent that UK IHT is due on the value, then no additional US estate tax would be due because of the double taxation treaty. Both the UK and the US charge a 40% rate so it would be a wash. The nil rate bands would be different however.

[SeagoonN]

Thanks, that's helpful and I'm pleased that I was wrong!

I will put a note in our "Death Book" which will assist the executor to mitigate any US IHT on share holdings.

[CliffEdge]

It seems clear to me from this that a nominee account will not avoid the tax.

Also, anyone who has completed a W-8BEN form in order to claim reduced US dividend witholding tax (I guess that is most of us) will have their details recorded by the IRS who will therefore know exactly who they are and what US shares they own.

I hope that I am wrong so if anyone knows better please let us all know!

A W8-BEN form only contains details about the investor, and not any holdings that he has or may have held in the past. So that alone would not lead to an assessment of tax. For BRK alone there would be no need for a W8-BEN since it does not pay a dividend and therefore no income tax withholding would apply.

Whether there is a theoretical liability is one thing. Whether the typical process of winding down a UK estate would trigger that liability is another. In most cases for nominee holdings, the executor would sell or transfer all positions and there would be no indication to anyone in the US that the shareholder had died, so the issue itself would not arise. It may be more messy for direct holdings as mentioned before.

And I would assume that to the extent that UK IHT is due on the value, then no additional US estate tax would be due because of the double taxation treaty. Both the UK and the US charge a 40% rate so it would be a wash. The nil rate bands would be different however.

I had to do a form in order to buy on HL

[Lootman]

It seems clear to me from this that a nominee account will not avoid the tax.

Also, anyone who has completed a W-8BEN form in order to claim reduced US dividend witholding tax (I guess that is most of us) will have their details recorded by the IRS who will therefore know exactly who they are and what US shares they own.

I hope that I am wrong so if anyone knows better please let us all know!

A W8-BEN form only contains details about the investor, and not any holdings that he has or may have held in the past. So that alone would not lead to an assessment of tax. For BRK alone there would be no need for a W8-BEN since it does not pay a dividend and therefore no income tax withholding would apply.

Whether there is a theoretical liability is one thing. Whether the typical process of winding down a UK estate would trigger that liability is another. In most cases for nominee holdings, the executor would sell or transfer all positions and there would be no indication to anyone in the US that the shareholder had died, so the issue itself would not arise. It may be more messy for direct holdings as mentioned before.

And I would assume that to the extent that UK IHT is due on the value, then no additional US estate tax would be due because of the double taxation treaty. Both the UK and the US charge a 40% rate so it would be a wash. The nil rate bands would be different however.

I had to do a form in order to buy on HL

Do you mean to buy BRK through HL? Or to buy anything i.e. as a requirement for opening a dealing account?

Obviously some dealers could insist on a W8-BEN when opening the account just on the off chance that you later decide to buy a US share. But others do not - Interactive Investors (Abrdn) only requires a W8-BEN if and when you actually buy or hold a US share. If you never do that then you never need one.

In any event, as noted, the existence of such a form does not imply that you will ever have a US tax liability. The vast majority of UK investors in US shares never do (over and above the withholding) on holdings in nominee accounts.

[CliffEdge]

It seems clear to me from this that a nominee account will not avoid the tax.

Also, anyone who has completed a W-8BEN form in order to claim reduced US dividend witholding tax (I guess that is most of us) will have their details recorded by the IRS who will therefore know exactly who they are and what US shares they own.

I hope that I am wrong so if anyone knows better please let us all know!

A W8-BEN form only contains details about the investor, and not any holdings that he has or may have held in the past. So that alone would not lead to an assessment of tax. For BRK alone there would be no need for a W8-BEN since it does not pay a dividend and therefore no income tax withholding would apply.

Whether there is a theoretical liability is one thing. Whether the typical process of winding down a UK estate would trigger that liability is another. In most cases for nominee holdings, the executor would sell or transfer all positions and there would be no indication to anyone in the US that the shareholder had died, so the issue itself would not arise. It may be more messy for direct holdings as mentioned before.

And I would assume that to the extent that UK IHT is due on the value, then no additional US estate tax would be due because of the double taxation treaty. Both the UK and the US charge a 40% rate so it would be a wash. The nil rate bands would be different however.

I had to do a form in order to buy on HL

Do you mean to buy BRK through HL? Or to buy anything i.e. as a requirement for opening a dealing account?

Obviously some dealers could insist on a W8-BEN when opening the account just on the off chance that you later decide to buy a US share. But others do not - Interactive Investors (Abrdn) only requires a W8-BEN if and when you actually buy or hold a US share. If you never do that then you never need one.

In any event, as noted, the existence of such a form does not imply that you will ever have a US tax liability. The vast majority of UK investors in US shares never do (over and above the withholding) on holdings in nominee accounts.

I already had a normal dealing account and attempted to buy Berkshire Hathaway and it forced me to do the form.