Clangers

Hi
I moved back to the UK after living in us for 20 years. I don't regret the move, am very happy back home.
However, I got my citizenship before leaving as I had a 13 year old, and thought to be in the safe side in case there were any issues that I may needed to return etc. 6 years later, we are still here....no issues.
I pay faithfully my taxes, use a US Based accountant. I won't say I enjoy having to declare every penny, and would love to confidently not be honest, but can't.
So far I haven't had to pay back taxes, as on a merger wage here, but after 6 years am starting to ned some assets moved over From US, such as selling my house that is being rented out snd perhaps moving some cash over to subsidise my income.......blah blah...

I transferred over 10k from Us to UK. It went to my own account, and I now have to declare it....if I had gifted the money would Instill have to have declared it I wonder?

Anyone else out there paying taxes and would like to share their experiences!

Thanks!!

Jerseygirl

I take it you are referring to US Taxes? Any movement of that amount or over in U.S. accounts is automatically reported to the U.S. authorities. Also if you have a TOTAL of $10K in foreign accounts USCs must file FBAR each year.

I agree with you being a USC can be a pain in the proverbial taxwise. Land of the free.

Clangers

Could I have gifted the money, so it didn't go into my account, or event not have transferred over as much?

Jerseygirl

As I posted above....ANY movement of that amount or over in U.S. accounts is automatically reported to the U.S. authorities. Don't be tempted to move several amounts under $10K to avoid this...as that could throw up a red flag.

yellowroom

When you say 'declare it', do you mean declare as income on your UK tax return? The answer to that question is 'no' if all you are doing is transferring money from a US account in your name to a UK account in your name, and you are up to date with your taxes in both countries. It's not 'income', it's moving of your assets.

Clangers

It will be from my US account to UK bank account. Apparently I have to complete a FBAR And accountant needs the name, address and account number of the account where the money is held and the maximum balance on the account (so if you received interest or there was already money in the account when you added the $10,000 what was the highest amount the account got to in 2014?).

Really!!
I need to denounce my citizenship....I'll have no money left after this!

Jerseygirl

You will also have to declare all other accounts outside the U.S. Even joint accounts must be declared.

robin1234

FBAR is a very simple form to fill out and submit. If I were you I wouldn't involve an accountant, simply do it yourself. It is a reporting requirement, nothing to do with tax. Filling out the FBAR doesn't increase or have any effect on any tax you may owe.

Perth

To add insult to injury, it will cost you a hefty fee to renounce

Clangers

The accountant does the rest of My taxes as well, as have property.

FBAR states A United States1 person2 that has a financial interest3 in or signature authority4 over foreign financial accounts5 must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year.

So does 10k exceed 10k??? If just -0 k transferred over...will I still need to disclose!

Thanks
QUOTE=robin1234;11671913]FBAR is a very simple form to fill out and submit. If I were you I wouldn't involve an accountant, simply do it yourself. It is a reporting requirement, nothing to do with tax. Filling out the FBAR doesn't increase or have any effect on any tax you may owe.[/QUOTE]

robin1234

[/QUOTE]

You say the amount is exactly $10k. However, surely, you have other accounts in the UK? Let's say, before the transfer from the US, you had a current account with 500 pounds in it and a savings account with two thousand pounds in it. So after the transfer from the US, you now have well over $10k.

Also, think of exchange rate fluctuations. You transfer $10k from the US. A month later, the dollar goes down a bit. Your $10k in the UK bank may now be worth $10,025!

Once you are over the ten thousand dollars, you have to list out all your foreign accounts in the FBAR. (Due date is not till June 30 the following year, though.)

Michael

The amount of money you transfer doesn't have any relevance on the amount of US tax owed. The gain on the sell of assets determines if US taxes is owed. Therefore if you liquidate $10,000 in securities that you purchased for $5,000 more than one year ago, you would report $5,000 in income at the preferential long term capital gains rate.

This is the way I think it works but check with a tax adviser to make sure.

Since you are a USC, you file form 1040 and you have an foreign earned income exclusion of up to $99,200 per year on any income earned outside the US. Your foreign earned income will be reported on form 2555 but line 21 of form 1040 will be $0 if foreign earned income is below the exclusion. Since no earned income is shown on form 1040, you should be able to use the standard deduction, exemptions, and the preferential tax treatment of long term capital gains (no tax owed if the marginal tax bracket is below 25% otherwise taxed at 15% or 20% above $450,000). Therefore it appears that any long term capital gains after deductions and exemptions up to $73,800 for married filing jointly or up to $36,900 for single will not be taxed. If you have US income such as pensions that are reported on US tax forms, then you will have US income reported other than capital gains and that will reduce the amount of long term capital gains that can be reported before the threshold is hit where you will have to pay US taxes on the gains.

2014-2015 Tax Brackets | Bankrate.com

The standard deduction for married filing jointly is $12,600 and each exemption is $4,000 for each spouse for a total of $20,600. For a single person or married filing separately, the standard deduction is $6,300 plus a $4,000 exemption for a total of $10,300.

However you may have to pay UK tax on the US capital gains since you have to file a UK self assessment on worldwide capital gains above £11,100.

UK Capital Gains Tax

If you sell your house in the US, you may possibly have very large capital gains where you will owe US taxes but those taxes paid should be able to be used as tax credits against UK taxes owed against that property. Since the UK capital gains tax rate is higher than the US capital gains rate and starts at a lower income level, all the US taxes paid will likely be able to be used to offset some but probably not all of the UK taxes owed.

Capital gains tax allowances and rates - Capital gains tax explained - Tax - Which? Money

Although gifting of stocks is a way of you not paying taxes on the gain, the cost basis is passed on to the receiver of the gift and that person will then be liable for taxes when the stock is sold. It may be possible (not sure) to gift US stocks to a non-USC but when the stock is sold, that person will have to file US form 1040 NR which does not give the tax breaks that form 1040 gives.

Giving Stock To Another Person

Therefore in your case, it appears that US taxes are probably not a major issue but UK taxes may possibly be.