In recent years, there have been a number of noticeable large companies switching their main stock listings to the New York Stock Exchange (NYSE).
Ferguson, the multibillion plumbing supplier, reincorporated their main listing from London to New York in 2022. CRH, the huge cement company and major employer in Ireland, followed suit in September 2023. Then came Flutter Entertainment, the multinational betting company, in May 2024, followed bySmurfit Kappa, a sustainable packaging company, delisted from the London Stock Exchange in July 2024 as part of its merger with WestRock. The combined company, Smurfit WestRock, now has a primary listing on the NYSE.
Why do companies change to a primary listing in the US?
Many companies choose to be listed in the US due to increased growth opportunities and the potential for higher valuations.
For companies such as CRH and Ferguson, most of their income is generated in North America, and it therefore makes sense for their primary listing to be within their key demographic.
The possibility of higher executive compensation and the chance that a company may one day enter the S&P 500 Index would also be persuasive benefits.
What impact will the move have on the day-to-day management of shares for Irish and UK shareholders?
While there can be many benefits for the companies in changing their main listing to the NYSE, with so many shareholders residing in the United Kingdom and Ireland, it does mean that suddenly they are faced with having to comply with US requirements.
Shareholders now find themselves having to complete W-8BEN forms for the IRS, and Medallion Signature Guarantees will be requested when they want to make a change to their account, something that, unless they have had North American shares before, they would likely never have come across.
Thankfully, we have noticed that the share registrars are recognising how daunting these new requirements can be. They are providing lots of advice and tips on their websites to help those who are new to US stock ownership navigate these new complexities.
How to attend to a deceased shareholder’s account with CRH, Ferguson, Flutter Entertainment and other reincorporated shares
When a non-US shareholder has died holding US shares, the requirements to attend to the shares can be quite unlike that experienced by the executors or personal representatives when dealing with assets in the country in which the deceased resided.
There will usually be the following requirements to tackle:
- Stock Transfer Form, including Irish Stamp Duty considerations for the Irish companies,
- Form W-8BEN,
- Notarised letter or affidavit of residence/affidavit of domicile,
- Medallion Signature Guarantee,
- Federal Transfer Certificate from the Internal Revenue Service (IRS) (Form 5173)
Where can shareholders of CRH, Ferguson and Flutter Entertainment obtain a Medallion Signature Guarantee?
With these shares now subject to the US requirements, shareholders will need to obtain a Medallion Signature Guarantee when arranging a transfer of these shares, which includes attending to a deceased shareholder’s account.
Medallion Signature Guarantees are often referred to as an MS Guarantee, Medallion Guarantee, MG stamp or Gold Medallion.
The Medallion Signature Guarantee is a special authentication stamp used as a preventative measure to combat fraud.
These are more easily obtained for US residents, who can usually arrange these through their bank.
For those who do not reside in the US, it can be a more challenging and expensive process.
Lester Aldridge LLP was the first UK law firm to be signed up to act as a Guarantor under the Medallion Signature programme STAMP.
We primarily assist with providing medallions for those where a shareholder has died.
See here for advice about our Medallion Signature Guarantee service.
What is a Federal Transfer Certificate or Form 5173?
A Federal Transfer Certificate is a form issued by the IRS that states that a foreign estate tax liability has been paid, settled or assessed to be zero, and the certificate issued by the IRS allows the asset holding institution to release the assets held to the executor – when it is required, it is needed regardless of whether the estate wishes to transfer or sells the investments.
A Federal Transfer Certificate can be referred to as IRS clearance, Form 5173, clearance certificate or transfer certificate.
For non-US resident/non-US citizen estates, the threshold for when this IRS clearance is usually required is when the value of US assets held exceeds $60,000 – note, this is not worked out on each individual shareholding, but on the combined value of all the US shareholdings.
With reincorporated shares, it is worth noting that the requirement is based on the US assets held at the date of death. Therefore, if you are dealing with an estate where the deceased died before the shares were reincorporated into the US, the requirement for clearance may fall away. Further, it should be noted that CRH has their own tax treatment rules when it comes to IRS clearance requirements.
If the combined value of the US assets is below $60,000, an affidavit of domicile or affidavit of residence would usually be accepted.
How do you obtain a Federal Transfer Certificate from the IRS?
If you are attending to an estate with a domicile outside of the US, with a non-US citizen, you will need to file a Form 706-NA with the IRS and supporting schedules and evidence about the estate.
If a Federal Transfer Certificate from the IRS is required, a personal representative will be prevented from collecting the assets, either to do a transfer or sale, until the clearance certificate is issued.
The IRS website will usually advise of a 6-9 month turnaround time, but personal representatives should be warned that since the pandemic, the IRS is advising in their responses to applications lodged with them that the processing time is now 24 months. Our team has experienced even longer processing times for applications which were lodged between 2020 and 2022 when the IRS was at the height of its response to the pandemic, and resources were stretched even more so than normal.
For many jurisdictions, there will be a tax treaty with the US, which will allow for double taxation relief for the estate. This must be claimed in the correct way to ensure that the estate does not pay taxes which are not due – the IRS will not necessarily correct this if it is not claimed.
It is important to note that the IRS expects to see a number of supporting forms with 706-NA applications, which is not always made clear in the instructions for the form. There are authority forms to complete as well as forms to claim any tax treaty benefits and also to declare the beneficial owners of the US assets. If you fail to include these supporting forms, it can severely delay your application.
If you need any assistance with obtaining a federal transfer certificate, our team has years of experience with this process. Please get in touch if you wish to learn more about this service.
Will more companies change to a listing on the NYSE?
There are always rumours about who may be next to change their primary listing.
Ashtead Group have confirmed that they may take the plunge with a move to the NYSE. If approved by shareholders, this move will see the company rename itself Sunbelt Rentals Holdings, Inc., and the move would be expected to happen in 2026.
It is also important to note that it is not just a change of listing which can find shareholders based in the UK and Ireland having to comply with US requirements.
If a listed company merges or there is a buy-out, a shareholder of a UK or Irish company can find themselves suddenly owning US shares.
An example of this would be in 2010 when British confectioner Cadbury was acquired by the US food giant Kraft. With all the mergers and splits that then followed, if those who originally owned Cadbury shares held on to all the new shares that were issued, they could potentially now be holding shares in Keurig, Dr Pepper, Kraft Heinz and Mondelez, which are all listed on the NYSE.
If you are attending to an estate with shares listed in the US and require assistance in meeting the requirements, please do get in touch with the International Private Client team to see how we may be able to assist you.
