My question is whether or not a client of Trading 212 faces the following potential problem, I ask it because shares with Trading 212 are actually held with Interactive Brokers, a US broker.
As I understand, there is a serious problem for non-US citizens, not US residents, in holding shares with a US-domiciled broker (like Charles Schwab, and perhaps Interactive Brokers LLC) in that on the investor’s death, Schwab will not release the US company shares to a UK executor until a US estate tax form 709 has been filed with the IRS and a Transfer release obtained from the IRS. This is complex and the IRS can easily take a year to complete the work. Meanwhile the account is frozen.
For a UK resident who is not a US citizen the UK-US treaty eliminates liability for US estate tax, but there is still the hassle of obtaining the IRS transfer form. My spouse would not be able to do this without professional lawyer/accountant help, and the cost of that could cut a long way into all savings I had made in transaction fees compared to using a UK broker who does not require an IRS transfer release, with risk of a year’s delay and costs. I am hoping someone can tell me that is not a risk when investing with Trading 212.