thesquonk

Hi

I will be receiving over $50k of inheritance from a family members estate.

1 Will the amount be subject to us taxes?
2 What is the best way to bring the money over from the uk?

Thanks

JAJ

1. Not federal income tax. Perhaps a state inheritance tax, check your state rules. Future interest and capital gains will be taxable.

You may need to report the inheritance to the IRS for information purposes.


2. Banks can do international transfers. That's one way, there are others.

Michael

No federal tax and unlikely state tax since there are only 7 states that collect inheritance tax, all exempt spouses, four of those states exempt descendants, and I believe all exempt a certain amount from inheritance taxes.

http://wills.about.com/od/stateestat...cetaxchart.htm

chartreuse

Sorry for your loss.

Most of us use services like XE, UKForex etc, as you get a better rate than a bank will usually give. Bear in mind, though, that if you get the funds deposited in your UK bank account and try to do that from over here, using Internet banking, you may come up against online transaction limits or other silliness.

Your options are:
Have the executor wire it to your US account at whatever rate their bank gives.
Have the executor wire it to your US account via one of the forex services mentioned.
Get the funds deposited into a UK account and bring them over in tranches.
Get the funds deposited into a UK account, fly over there to fill out whatever forms they want and transfer it all in one go.

Nutmegger

When I had a similar situation, there was no tax to pay, but I did have to report the bequest with my annual tax return for the year on IRS Form 3520. However, I think that if you receive below a certain amount, you are exempt from the filing. Your accountant should be able to tell you, or you can find the form and its instructions online. The executor arranged the wire (in dollars so there was no charge to me for conversion) straight into my US bank account.

ian-mstm

I received a similar amount from my uncle's estate a few years ago.


Mine wasn't... yours won't likely be either.


I gave the attorney who handled the estate my US bank info - routing number, checking account number, etc., and the money was transfered and deposited a few days later. The bank charged me a nominal fee (less than $10) for the international transfer.

Ian

dolega

Don't believe any taxes are involved other then that those flow from the gift i.e., income tax and CGT; however, be wary of any inheritance tax that might be due (depending on which State you are in).

Dougster75

We have a similar situation but XE.com were happy to increase our online transaction limit to a sum that would more than cover this sum with just a phone call, uploaded scan of driving license and utility bill.

chartreuse

It was the bank's limit that I was thinking of - IME they can be terribly inflexible.

thesquonk

Thank you all!

Dougster75

Crikey - didn't even think that would be an issue. I'd assumed that if XE were sucking out the cash from the bank then they wouldn't have had a choice...better check into that. Never easy...

aceastwood

I have just set up with xe.com based on information from this board and today I have been able to compare with the bank for the first time. xe.com was actually very slightly worse than the bank (Bank of Scotland).

£5,000 at Barclays. And you cannot wire money - you can use faster payments, so make sure the forex company will accept these. Oanda didn't seem sure, so I went with xe.

Neither xe nor Oanda will accept incoming wires from third parties.
Get the funds deposited into a UK account, send them a letter with instructions on how to wire your money to your US account.

Lazzza

I have wound up several estates (in Scotland) where beneficiaries are in the US. I have no idea about the US tax situation, filing etc.

However, inheritance tax, at least in UK, is not a tax on the beneficiary. It is a tax on the estate but only if the estate is large enough to be taxable. By the time the money is available to be paid to the beneficiaries, it is net. So you should have nothing to worry about on this front. This is only my experience from the point of view of the UK system.

My firm's practice is to request the beneficiary's bank details. We also need the ABA routing number because the US I don't think uses the IBAN system.

Then we just instruct the transfer and 'bobs your uncle' the funds transfer.

I have never had an issue with limits either. and I have instructed transfers of much larger sums. Provided the sources of funds can be tracked, there should be no issues for you.

Lazzza

I should also add that these funds will be held on deposit with the Solicitor who is dealing with the estate in the UK. It is very easy for Solicitors to transfer funds internationally through their client account. You should contact the Solicitor and they will discuss this with you.