Pulaski

Well the UK inheritance tax isn't your issue at all, it's your parents and their estate. And I don't mean that on any argumentative way - it just literally isn't anything you need to concern yourself with.

Otherwise, don't over think it - your bank is required by law to report receipt of amounts exceeding $10,000 from overseas, but that has really zero consequence to you. As I said above, just let your bank know that $x,000 is coming into the account, it's a gift from your parents to help with college expenses, and you'll be fine. IIRC you don't have to report receipts from overseas until they exceed $100k.

vikingsail

Adding to Pulaski's point there maybe inheritance tax implications for a person gifting if they die within 7 years of the gift. This can usually be offset against the estate exemption. For example, for most people the exemption is 325K. If you gift 50K and die within 7 years 50K gets deducted from your exemption. So its an assets calculation game. 325k seems a lot but with houses in many parts of the UK this threshold may be reached fast.

https://www.gov.uk/inheritance-tax/gifts

Adnams

As always thanks for all your insightful responses.

malch

I have a read downer on 529 plans which were created to benefit the financial services industry and colleges.

Watch out for high management fees. Also, you'll almost certainly be required to disclose a 529 and colleges will consider the money theirs. They will reduce any financial aid that you may qualify for.

If you're on a modest income you can use a Roth IRA to save for college. It will take a few years to shovel the money in because of annual contribution limits. But the money will grow tax free and you will not need to disclose it on any financial aid application. Normally, you can't withdraw money from a Roth before age 59.5 but there is an exception for college tuition. It's a great option for some, but certainly not all. So you should do your homework first.

Steve_

The UK has an estate tax treaty with the US that limits the taper to 3 years total. It's very important that you establish that your domicile is in the US though as the UK has very weird domicile rules - however the treaty overrides the domicile rules, another advantage.

Bear in mind that residency for estate tax purposes is totally different than it is for income tax purposes.

Anyway to answer the original question - there are US banks that have Sterling accounts if I can believe what I hear on NPR. So you could just deposit the money without converting it.

Pulaski

Very, very few do, and paying interest on non-USD a/cs wasn't legal until about 5 years ago. It was this quirk of US banking regulations that spawned offshore banking in the Cayman Islands.

I doubt that many US banks will ever bother to invest in the software required to offer non-USD a/cs, and the last time I looked I found one in, I think, Missouri, that I suspect is actually offering offshore accounts, but isn't making that totally clear. I think there's a regional California/ West Coast bank, that is Japanese owned that I think offers non-USZ a/cs.

mrken30

https://www.everbank.com/currencies

This article may also help.
Opening A Foreign Currency Account

I personally use Citibank, but I am not sure if multi-currency accounts are available for new customers. I have one debit card which I can switch between Euro, Sterling or Dollar accounts. They stopped the use of UK checks earlier this year. You need to hold a minimum of $2000 in each account otherwise you incur fees.

I can't see how you would really benefit from having a sterling account, unless you have outgoings in sterling.

mrken30

Has anyone used https://www.xendpay.com/ to send money?

I found out about it from this story Entrepreneur Paresh Davdra interview: How I build Rational FX and Xendpay - Business Insider