Remortgaging house
 

Hi,

We are due to start our new lives in the US October this year.

Our house is due to remortgage in 6 months time. we dont plan on selling just renting. One of my ideas is when remortgaging is to borrow £50k plus to buy somewhere over there out right until we have a credit rating.
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can anyone foresee any issues with doing this in the US? Taxes? Money laundering checks etc?
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I dont have a issue borrowing more on my house my mortgage provider said. And i can get permission to let from them so no need for buy to let mortgage

Thanks

Re: Remortgaging house
 

Not sure what your question is? You can send yourself a wire from the UK to US no problem, I sent a number of significant ones when I moved. I always put a good description of the source of the funds in to the wire details to make it clear it was my own (previous taxes) funds moving accounts and not “income”.

Transfers of you own funds are not taxable.

You could run in to AML check issues if you try to split the wire into smaller ones. The size you are takings about will be reportable by the bank but if the source is legit there should be no issue, any big Fed Wire Bank will get 1000’s of these every day for much bigger amounts.

Re: Remortgaging house
 

the mortgage company will want a clear explanation and proof of where the money came from so if you have the documents to back it up it should be good. (they will likely ask to see bank statements and want to understand the source of any larger sums of money). we had to provide all sorts of explanations recently for our latest mortgage.

Re: Remortgaging house
 

Any foreign transfer in excess of $10,000 will be reported to the treasury department by the relevant bank but that is a routine process and should not be of any concern to you. Many such transactions occur every day. You are extremely unlikely to ever have to justify that transaction but keep your paperwork from the sale of your house and/or other sources of the funds so that you can back it up if need be. Do not split it up into many smaller amounts less than $10,000, that will raise red flags.

I think your plan is good and the only other issue to be aware of would be if you sold you house whilst subject to us taxes, or remortgaged again. You would then have to pay tax on any foreign currency gains when you pay off your mortgage or at the time you remortgage. So best, to get the remortgage completed before you get over here to eliminate that risk. In short, if the US Dollar has dropped in value against the British Pound when you pay off the mortgage versus when you took it out, then the iRS will take the view that you made a foreign currency gain because the debit in US Dollars at the time of pay off is less than the debt in US Dollars when you took it out. They will tax you on that gain.