GBP Sent to USA - Meant as gift, but, declared as inheritance to Broker
#1
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GBP Sent to USA - Meant as gift, but, declared as inheritance to Broker
Hi all,
This is a follow up form a previous post.. would appreciate some further insight..
After my Father was deceased, as per his will all of his assets went to my mother. She then, in possession of the money (after probate etc), sent me an amount to clear the second mortgage (60k GBP range).
We discussed that she should declare it as a gift, which is correct?
In any case, she told the broker it was a bequeathed sum that was being transferred to me. This caused them to request a copy of the will and probate decision. All was OK and the money was wired.
The final qu. is.... will this affect any of my tax reporting here (US), or mean that I have to deal with HMRC anytime soon?
As always,
Thank you.
H
This is a follow up form a previous post.. would appreciate some further insight..
After my Father was deceased, as per his will all of his assets went to my mother. She then, in possession of the money (after probate etc), sent me an amount to clear the second mortgage (60k GBP range).
We discussed that she should declare it as a gift, which is correct?
In any case, she told the broker it was a bequeathed sum that was being transferred to me. This caused them to request a copy of the will and probate decision. All was OK and the money was wired.
The final qu. is.... will this affect any of my tax reporting here (US), or mean that I have to deal with HMRC anytime soon?
As always,
Thank you.
H
#2
Re: GBP Sent to USA - Meant as gift, but, declared as inheritance to Broker
UK inheritance tax, if applicable, is usually paid by the executor as part of the probate process and usually the beneficiaries don't get their proceeds until after it has been paid.
In the US federally there is no inheritance tax, just an estate tax, and as the estate appears to be located in the UK there is no US estate tax to pay. Possibly you may be liable an inheritance tax to your state if you live in one that has it.
In the US federally there is no inheritance tax, just an estate tax, and as the estate appears to be located in the UK there is no US estate tax to pay. Possibly you may be liable an inheritance tax to your state if you live in one that has it.
#3
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Re: GBP Sent to USA - Meant as gift, but, declared as inheritance to Broker
If the gift was over US$100,000 you would need to file IRS Form 3520 - at today's exchange rate this seems unlikely.
#4
Re: GBP Sent to USA - Meant as gift, but, declared as inheritance to Broker
Which state do you live in? There are a few states which levy an estate tax.
#5
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Location: North Norfolk and northern New York State
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Re: GBP Sent to USA - Meant as gift, but, declared as inheritance to Broker
But, as OP clearly states, it's a gift from a family member in the UK, not an inheritance. So there'd be no inheritance tax due, whatever state.
#6
Re: GBP Sent to USA - Meant as gift, but, declared as inheritance to Broker
But per the last-but-one para the transfer was processed as an inheritance, so he should keep careful records of the true nature of the transfer/source of funds if he lives anywhere that taxes inheritances in case the taxing authorities get wind of the transfer records.
#7
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Re: GBP Sent to USA - Meant as gift, but, declared as inheritance to Broker
Thank you all for the comments. I live in MA, I will bring this up with my CPA. Do foreign exchange brokers (UK based), report to HMRC, then?
#8
Re: GBP Sent to USA - Meant as gift, but, declared as inheritance to Broker
I am not sure how that works with a "virtual remittance", by a broker like Transferwise, which funds remittances locally - you pay them GBP, and they pay you USD from their USD a/c, without actually sending the money internationally.
#9
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Re: GBP Sent to USA - Meant as gift, but, declared as inheritance to Broker
I think the transfers have to be accompanied by any supporting information/explanation.
I am not sure how that works with a "virtual remittance", by a broker like Transferwise, which funds remittances locally - you pay them GBP, and they pay you USD from their USD a/c, without actually sending the money internationally.
I am not sure how that works with a "virtual remittance", by a broker like Transferwise, which funds remittances locally - you pay them GBP, and they pay you USD from their USD a/c, without actually sending the money internationally.
#10
Re: GBP Sent to USA - Meant as gift, but, declared as inheritance to Broker
If she lives in the UK then the gift is a "potentially exempt transfer". If your mother dies within three years of the date of the gift, it is added back into her estate, if she dies between three and seven years then part of the value (reduces each year) is added back into her estate.