Tax questions
So my husband is now working out in the us and I am joining him in October, my plan initially is not to work for abit.
Now with regards to money in the uk account they have advised him that he can never have over 10,000 in this or he will be fined/charged double tax. Now here's the question if anyone can help, I am getting made redundant in October and getting paid out over 20k now does this having over 10,000 fine relate to me also as at this point I wont be working in the us/have a ssn etc I don't want either of us to be charged anything extra and just working out what I need to do. thanks |
Re: Tax questions
Originally Posted by hannahc16
(Post 12263249)
Now with regards to money in the uk account they have advised him that he can never have over 10,000 in this or he will be fined/charged double tax
If you have over $10k (dollars not pounds) total in foreign bank(s) you will need to file an FBAR. However, that's not tax or a fine, just a small pain of a formality! Things get a bit more burdensome if you need to file form 8398, but that's much higher than 10k. |
Re: Tax questions
Originally Posted by tom169
(Post 12263322)
Who told you this? Some scaremongering unqualified HR rep?
If you have over $10k (dollars not pounds) total in foreign bank(s) you will need to file an FBAR. However, that's not tax or a fine, just a small pain of a formality! Things get a bit more burdensome if you need to file form 8398, but that's much higher than 10k. |
Re: Tax questions
Originally Posted by hannahc16
(Post 12263327)
This will be in my bank account though as it will be the final pay check from my company do we still need to do anything as I wont be in the us when I get the money and I wont have been working in the us etc so the money wont be in my husbands acc.
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Re: Tax questions
Originally Posted by hannahc16
(Post 12263327)
This will be in my bank account though as it will be the final pay check from my company do we still need to do anything as I wont be in the us when I get the money and I wont have been working in the us etc so the money wont be in my husbands acc.
Your US income tax burden will be determined by how you declare yourself at the end of the year. You'll have a few options in your first year as regards to being a dual resident or electing to be a resident for the entire year. Note: this is tax residency, not immigration residency. Needless to say you shouldn't get double taxed (or fined!!). |
Re: Tax questions
Originally Posted by MidAtlantic
(Post 12263333)
No you do not need to do anything and you will not be penalized in any way.
Then once I have left my job got my p45 I have been told to complete NRL1 for the house we are renting and a p85. Thank goodness I've been really worrying about it and what I will have to do when it gets paid, so just to confirm I am ok to leave it sitting there or once I am in the us the same will apply to me? |
Re: Tax questions
You can stop worrying! Leave it there or transfer it to the US later. It's your money so do what you like with it.
Enjoy your new life in the USA! |
Re: Tax questions
Originally Posted by MidAtlantic
(Post 12263342)
You can stop worrying! Leave it there or transfer it to the US later. It's your money so do what you like with it.
Enjoy your new life in the USA! If you can afford to leave it in the UK you may want to wait for a more advantageous exchange rate. :) |
Re: Tax questions
amazing thank you so much both of you, you have really made my day.
If I was to move some over to our us account I'm assuming that's fine, I feel like my other half has been told so much like if we transferred money across we would have to explain it etc |
Re: Tax questions
Yes you can move as much or as little as you like. You are sometimes asked to explain the source, but that is just a reporting thing.
If you are going to make transfer(s) you should look at using a foreign exchange specialist. Transferwise is often recommended, but there are many others. You will get a much better overall rate (ie taking exchange rate and fees into account) than main-line banks. |
Re: Tax questions
It has often been advised to "warn" the receiving bank of a large transfer and explain the source beforehand.
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Re: Tax questions
Originally Posted by tom169
(Post 12263393)
It has often been advised to "warn" the receiving bank of a large transfer and explain the source beforehand.
However do not attempt to discuss this with your bank as (i) they are prohibited by law from telling you if you account/transaction has been reported so you can't learn anything, in other words if your account has been reported you will never know and cannot find out - the records cannot be subpoenaed and bank employees cannot testify in court on the subject, and (ii) that is one sure way to have the bank dig through your account looking for anything they don't understand and deciding that it is suspicious. :eek: If that shocks you, the law in the UK is almost identical. :nod: |
Re: Tax questions
I think you need to file an FBAR, even if you aren't working and/or have -$0- US income / tax to report. Depends a bit on your status in the USA.
The answer of who must file an FBAR is: 1) the United States person (citizens, residents, certain visa holders) who has / had a financial interest in or signature authority over at least one financial account located outside of the United States; and 2) the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported. https://www.irs.gov/businesses/small...-accounts-fbar Now the way you determine if you have to file it is when you do your tax form you come to a line item that asks the questions about FBAR requirements. If you answer yes to these requirements, you need to file an FBAR, which is a separate document from your tax return (although it is asked as part of the tax return). So even if you go through the tax form and have no US income and no requirement to file US taxes, you still may find yourself in a situation in which you have to file a US FBAR form as you met the test for that separate form. I'm not entirely sure, but in walking through the decision tree of dealing with tax forms it would seem this would be the case. In a general sense, it's a hell of a lot easier to be safe and fill this out than it is to be sorry later on should it come back to bite you. In situations like this, I generally err on the side of caution. As for what to do with the money, you can keep it over there or bring it over. Note interest income, even if earned abroad, is considered income for the purpose of your taxes so that will need to be reported (eventually, when you get over the minimum reporting levels). |
Re: Tax questions
Though if you are renting out a property in a foreign country (i.e. the UK) you'll want to do some decent pre-immigration thinking before accepting the move; including foreign currency mortgage gains, the US section 121 exclusion & the UK main residence exemption...
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Re: Tax questions
Originally Posted by bobsmyuncle
(Post 12265584)
Sorry to jump in on this thread... We are kind of in a similar situation...
a) My spouse and me just moved to US and have more than 20K savings in each of our accounts. Should we declare this? My spouse is not working yet in US. b) Can we transfer all that money from Uk to US towards buying a house? Are there any US tax implications? (this is the savings after all UK tax being paid). |
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