Ives

If we move our money from our UK bank to our US bank, will it be considered income or capital gains or something, and will we taxed on it or something? We've left it there, and now it is worth so much less with the stupid new Brexit exchange rate I'd rather leave it and see if it gets back to normal ever, but been wondering this for a while. It's probably over $25,000 or 30,000.

tom169

I created a similar thread to this a while back.

http://britishexpats.com/forum/usa-5...rriage-880018/

I went ahead and used Transferwise to move more than that sum and had no issues.

I hope if you had the obligation you have been reporting this overseas account.

mrken30

I think you're safe unless it's drug money. Be careful about civil forfeiture.

Ives

What is civil forfeiture and who do I report the overseas account to?

tom169

Civil forfeiture is where a law enforcement agency takes the cash they suspect to be because of some wrong doing.

As for reporting requirements:

https://www.irs.gov/uac/newsroom/tax...ements-in-june

ian-mstm

You will not be taxed on your own money... because it's not "income or capital gains or something".


I suggest you transfer it in amounts less than $10,000... which is the threshold for the US Treasury Department requiring you to report and verify the source of the income due to the RICO act (read = money laundering).

Ian

Jerseygirl

I've transferred 6 figure amounts all at once...never had a problem. If you don't have anything to hide there really is no need to keep the figure under the $10,000.

Ives

Does it need to be reported every year or just once?

ian-mstm

It's a reporting requirement only... but some people like to avoid divulging information to the US federal government if there's a way to avoid it.

Ian

ian-mstm

Just once.

Ian

Jerseygirl

I realise that but transferring several amounts of under $10 may raise red flags...that the transferee is purposely flying under the radar. Although I don't think 2 or 3 transfers will be a problem.

malch

There's really a lot of different questions here.

1. Be sure you have some paperwork to support the legitimacy of the source of these funds. You probably won't need it but if some agency suspects you might be laundering money, you'll really, really, really want to have some documentation!

2. If you have been in the US a while (and filed taxes) you should have already declared overseas funds. If you failed to do so, there could be some trouble ahead.

3. There are various money transfer services that will offer dramatically better exchange rates and lower fees than the big name banks.

4. If you physically carry more than $10,000 in cash into the USA you are required to report it. If you transfer the money through a bank or other electronic service, that institution will need to report it. Making multiple transfers of $9,000 (cash or electronic) is a very bad idea. It will set off lots of alarm bells since this is just the kind of thing a not-so-smart criminal would do.

5. Interest earned on that money while it's in the UK (or capital gains if it's a non-cash asset) will be contribute to your worldwide income. And the US tax authority (IRS) does require you to report and pay tax on income earned anywhere on the planet!

Pulaski

This bit is correct. So far so good.
You're joking right? .... Absolutely DO NOT break it into amounts less than $10,000, because that is exactly when law enforcement get interested and will seize the money given the slightest sniff of anything improper going on! .... Tip: breaking the sum into amounts less than $10,000 IS the slightest sniff of something improper going on.

There are probably millions of wires daily that get reported and there is absolutely nothing to worry about having your money reported to the IRS, unless the money is the proceeds of something improper, or your färting around with multiple transactions gives it the appearance of something improper going on.
This is good advice, to which I would only add, it's not just $9,000, but any amounts between $8,000 (or even less), and $10,000.

malch

Agreed!

I have often wondered if good folks may have run fowl of this because they wanted to transfer large sums in multiple batches to average/hedge exchange rate fluctuations?

At the end of the day, I think it's important to have that documentation showing the legitimate source of the funds so you can defend against any accusations of impropriety.

Pulaski

If you want to do that, I would recommend that you do it in tranches of more than $10,000, say around $12k (or more), and send round amounts of GBP (or other currency) which will show up as very irregular amounts after they have been converted to USD.
I wouldn't worry too much about that, so long as you have bank statements to show the balance in a British bank account, and perhaps to show at least some of how you saved it a bit every month, or that you inherited some of it from uncle Wilber.

I also usually recommend that you tell your bank or credit union ahead of the first wire arriving that you will be sending roughly $X,000 dollars which are your life savings/the proceeds of the sale of your home, etc.