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Living in US /about to receive inheritance in the UK

Living in US /about to receive inheritance in the UK

Old Aug 7th 2016, 7:22 pm
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Default Living in US /about to receive inheritance in the UK

Moved to US 30+ years ago from the UK, now US citizen. My dear old dad, having reached the ripe old age of 101 passed away in the UK about 3 months ago. My sister in the UK is handling probate and is pretty much done. My share will be in the 100-120,000 GBP range. The immediate effect of Brexit knocked 15% off this from the time my dad passed at the end of April, and I am trying to decide the best way to handle the still significant amount once everything has passed probate. I don't immediately need this- although still have a kid at home about 4 years away from college- but as I cannot see the pound recovering much soon (and who knows what may happen once Article 50 is triggered) am inclined to bring most of it over here. Related to this, I have a couple of questions for the community. Say I brought 100K GBP over here, and left the balance over there to cover my annual trips back.

I still have my Lloyds Bank checking account from when I lived in the UK, but it has never had more than a few hundred in at best. I guess I could dump the balance in there (10-20K), but that would get little or no interest. I had wondered about opening a higher interest account in the UK, but have been told by several sources that this would not be possible as I do not live in UK. Is this true? I get my measly bank statements from my current account sent to me hardcopy to my address in the USA, so do not understand the difference between being able to maintain a UK account with a US address when I haven't lived there for over 30 years and not being able to open a new one (even if I should choose to do so). Can anyone explain this?
Alternatively, someone has suggested I open a sterling account at a US Bank. Not sure of the advantages of that though. Has anyone any experience? I guess I'd only do that if I was hellbent on keeping some of the funds in GBP so as to avoid exchange costs- although I imagine such accounts would carry their own costs- and this of course would not protect me from the falling pound.
Finally, I would imagine that some folks on this forum have had to transfer significant amounts of money from UK to the US. My local bank here says that wiring it is the best option. That sound right? Thanks in advance for any advice- I don't normally move in such high finance circles.
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Old Aug 7th 2016, 11:46 pm
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Default Re: Living in US /about to receive inheritance in the UK

I am in the same boat about to bring 45,000 pounds to USA for college and I am looking at the best way
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Old Aug 7th 2016, 11:54 pm
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Default Re: Living in US /about to receive inheritance in the UK

Wow they are dropping like flies in the UK. What is this the third post on UK inheritances this week.

BTW sorry to read of your father's passing. A nice age and I hope he went peacefully and that you were able to see him not to long ago to say your goodbyes.
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Old Aug 8th 2016, 12:09 am
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Default Re: Living in US /about to receive inheritance in the UK

I'm also waiting on probate for an inheritance of around 35,000GBP.
Using a wire transfer to a US bank is probably the worst option. Need to use a dedicated currency service.
I enquired with my bank (Regions) and was quoted 4c below the live rate for amounts up to $50,000. Over $50k, they quoted 2c below live. Then there will be wire fees on top.
I enquired with TorFX and they quoted me 2c below live.
I intend to use Transferwise when the time comes. They transfer at the live rate and charge a flat 0.5%.
It may be worth asking your bank but I doubt they would beat 0.5%
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Old Aug 8th 2016, 2:13 pm
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Default Re: Living in US /about to receive inheritance in the UK

Lots of questions, so I may come back and have another stab at answers, but you can pretty much rule out opening a GBP account with a US bank. I don't know of ANY US bank that offers foreign currency accounts in the US, and in fact it wasn't actually legal for a US bank to offer foreign currency accounts until about three years ago.

The closest you could come would be to open an account with a US bank in the Cayman Islands (US banks have Cayman branches to get around the old prohibition on foreign currency accounts), but the fees are likely to be hefty and the interest still not great.

Last edited by Pulaski; Aug 8th 2016 at 2:17 pm.
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Old Aug 14th 2016, 6:01 am
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Default Re: Living in US /about to receive inheritance in the UK

You're an existing customer at Lloyd's so opening a saving account should be no problem, it's only an issue for new customers. Interest rate is crappy though, but isn't it everywhere. Make sure they know you're not resident for tax purposes in the UK, which will probably set in motion the FATCA requirements so they should spit out a W-9 for you to sign.

Also you'll have to do the whole FBAR and 8938 thing if you leave the money in the UK.

Personally I wouldn't move it if I were you, the average exchange rate over the last 25 years has been $1.64 and at the moment it's $1.29, and likely to get worse. I'd wait until your kid goes to college and do it then.

Remember also you have to declare the receipt of the inheritance on Form 3520.
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Old Aug 14th 2016, 6:03 am
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Default Re: Living in US /about to receive inheritance in the UK

Originally Posted by Pulaski View Post
I don't know of ANY US bank that offers foreign currency accounts in the US, and in fact it wasn't actually legal for a US bank to offer foreign currency accounts until about three years ago.
There's some bank that advertises (sponsors) on NPR that they offer sterling accounts, can't remember the name though. Somewhere in California?
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Old Aug 14th 2016, 12:23 pm
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Default Re: Living in US /about to receive inheritance in the UK

Originally Posted by Steve_ View Post
There's some bank that advertises (sponsors) on NPR that they offer sterling accounts, can't remember the name though. Somewhere in California?
Interesting. ..... I went looking, and Union Bank does now, but apparently only to commercial and private bank customers. Union Bank belongs to the Japanese, so I am not entirely surprised.

Last edited by Pulaski; Aug 14th 2016 at 1:12 pm.
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Old Aug 14th 2016, 1:00 pm
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Default Re: Living in US /about to receive inheritance in the UK

You will need to declare the inheritance to the IRS on a 3520 form, but there is no US tax liability on the money.

If you leave the money in the UK make sure you also declare the accounts ion FBAR and 8938 if you are above the thresholds. Also stick with basic saving accounts as owning foreign investment funds has nasty US tax consequences and even individual foreign stocks cause a compliance and accounting nightmare at tax time.

Absent any foreign exchange issues I would move the money to the US so it could be easily invested.....that's what I did when my mum died and I just had her lawyer/executor wire the money to my US bank.
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Old Aug 14th 2016, 1:06 pm
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Default Re: Living in US /about to receive inheritance in the UK

We have lived in the USA for 29 years and kept our checking account with Midland Bank, which was acquired by HSBC many years ago. When we received inheritances in 2010 (all 3 of our surviving parents died within 9 months of one another), we were able to open an on-line bonus saver account with HSBC. The other savings accounts including Regular Saver and cash ISA's were all only available to UK residents.

At the time we were customers of HiFx and transferred most of the inheritance (~£75k) using them. However, with FATCA implemented I received an email a year or so later from HiFx saying that they were dropping all customers resident in the USA.
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Old Aug 14th 2016, 4:04 pm
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Default Re: Living in US /about to receive inheritance in the UK

This is a useful article Five of the best offshore current accounts | This is Money

Looks like you may be able to open an account with State Bank of India UK or Bank of India. Coincidentally these same banks were offering reasonable interest on savings a few months ago.
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Old Aug 14th 2016, 4:08 pm
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Default Re: Living in US /about to receive inheritance in the UK

Originally Posted by mrken30 View Post
This is a useful article Five of the best offshore current accounts | This is Money

Looks like you may be able to open an account with State Bank of India UK or Bank of India. Coincidentally these same banks were offering reasonable interest on savings a few months ago.
Be wary of banks offering remarkably high interest rates, there is often a reason. ..... A bank here in NC started offering peculiarly high interest on deposts in 2007; in 2008 it collapsed, and I wasn't totally surprised. High interest rates offered by a bank are effectively a very mild version of a Ponzi scheme - pulling in new investors with an offer of higher returns to keep the bank afloat.

Last edited by Pulaski; Aug 14th 2016 at 5:29 pm.
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Old Aug 14th 2016, 5:23 pm
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Default Re: Living in US /about to receive inheritance in the UK

Originally Posted by nun View Post
You will need to declare the inheritance to the IRS on a 3520 form, but there is no US tax liability on the money.

If you leave the money in the UK make sure you also declare the accounts ion FBAR and 8938 if you are above the thresholds. Also stick with basic saving accounts as owning foreign investment funds has nasty US tax consequences and even individual foreign stocks cause a compliance and accounting nightmare at tax time.

Absent any foreign exchange issues I would move the money to the US so it could be easily invested.....that's what I did when my mum died and I just had her lawyer/executor wire the money to my US bank.
Exactly how I handled this situation. The executor also supplied a Form R185 from the UK to show my share of the net income of the estate during the administration period and the tax already deducted.
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