Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

Tax questions

Tax questions

Old May 31st 2017, 9:04 am
  #1  
Just Joined
Thread Starter
 
Joined: Feb 2017
Posts: 29
hannahc16 is an unknown quantity at this point
Default 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
hannahc16 is offline  
Old May 31st 2017, 10:56 am
  #2  
BE Forum Addict
 
tom169's Avatar
 
Joined: Mar 2015
Location: NC, USA (ex Yorkshire)
Posts: 4,023
tom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond repute
Default Re: Tax questions

Originally Posted by hannahc16 View Post
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
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.
tom169 is offline  
Old May 31st 2017, 11:00 am
  #3  
Just Joined
Thread Starter
 
Joined: Feb 2017
Posts: 29
hannahc16 is an unknown quantity at this point
Default Re: Tax questions

Originally Posted by tom169 View Post
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.
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.
hannahc16 is offline  
Old May 31st 2017, 11:08 am
  #4  
BE Forum Addict
 
Joined: Aug 2013
Location: Athens GA
Posts: 1,912
MidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond repute
Default Re: Tax questions

Originally Posted by hannahc16 View Post
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.
No you do not need to do anything and you will not be penalized in any way.
MidAtlantic is offline  
Old May 31st 2017, 11:10 am
  #5  
BE Forum Addict
 
tom169's Avatar
 
Joined: Mar 2015
Location: NC, USA (ex Yorkshire)
Posts: 4,023
tom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond repute
Default Re: Tax questions

Originally Posted by hannahc16 View Post
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.
If your husband is signatory to the account then he'll still end up needing to file FBAR. It's not a big deal, it's a semi-online few page form.

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!!).
tom169 is offline  
Old May 31st 2017, 11:15 am
  #6  
Just Joined
Thread Starter
 
Joined: Feb 2017
Posts: 29
hannahc16 is an unknown quantity at this point
Default Re: Tax questions

Originally Posted by MidAtlantic View Post
No you do not need to do anything and you will not be penalized in any way.
so even though it will be well over the 10,000 it will be in my account no connection to other half and I'm not going to be working in the us at this point etc I can just leave it there.

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?
hannahc16 is offline  
Old May 31st 2017, 11:20 am
  #7  
BE Forum Addict
 
Joined: Aug 2013
Location: Athens GA
Posts: 1,912
MidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond repute
Default 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!
MidAtlantic is offline  
Old May 31st 2017, 11:23 am
  #8  
BE Forum Addict
 
tom169's Avatar
 
Joined: Mar 2015
Location: NC, USA (ex Yorkshire)
Posts: 4,023
tom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond repute
Default Re: Tax questions

Originally Posted by MidAtlantic View Post
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.
tom169 is offline  
Old May 31st 2017, 11:29 am
  #9  
Just Joined
Thread Starter
 
Joined: Feb 2017
Posts: 29
hannahc16 is an unknown quantity at this point
Default 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
hannahc16 is offline  
Old May 31st 2017, 11:50 am
  #10  
BE Forum Addict
 
Joined: Aug 2013
Location: Athens GA
Posts: 1,912
MidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond repute
Default 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.
MidAtlantic is offline  
Old May 31st 2017, 12:26 pm
  #11  
BE Forum Addict
 
tom169's Avatar
 
Joined: Mar 2015
Location: NC, USA (ex Yorkshire)
Posts: 4,023
tom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond repute
Default Re: Tax questions

It has often been advised to "warn" the receiving bank of a large transfer and explain the source beforehand.
tom169 is offline  
Old May 31st 2017, 12:38 pm
  #12  
Lt Col (Retd)
 
Pulaski's Avatar
 
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 47,759
Pulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond repute
Default Re: Tax questions

Originally Posted by tom169 View Post
It has often been advised to "warn" the receiving bank of a large transfer and explain the source beforehand.
Yes, I would strongly recommend that you tell your bank in the US ahead of receiving any amount of $10,000 or higher. While it likely won't be an issue, US banks have an obligation to report to FinCEN any amount over $5,000 which they deem "suspicious", and they have extremely wide discretion to decide what they think is suspicious.

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.

If that shocks you, the law in the UK is almost identical.

Last edited by Pulaski; May 31st 2017 at 12:42 pm.
Pulaski is online now  
Old Jun 1st 2017, 4:35 pm
  #13  
MODERATOR
 
penguinsix's Avatar
 
Joined: Nov 2006
Location: Hong Kong, mostly.
Posts: 5,105
penguinsix has a reputation beyond reputepenguinsix has a reputation beyond reputepenguinsix has a reputation beyond reputepenguinsix has a reputation beyond reputepenguinsix has a reputation beyond reputepenguinsix has a reputation beyond reputepenguinsix has a reputation beyond reputepenguinsix has a reputation beyond reputepenguinsix has a reputation beyond reputepenguinsix has a reputation beyond reputepenguinsix has a reputation beyond repute
Default 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).
penguinsix is offline  
Old Jun 1st 2017, 5:44 pm
  #14  
BE Enthusiast
 
Joined: Nov 2012
Posts: 822
Cook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond repute
Default 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...
Cook_County is offline  
Old Jun 4th 2017, 11:34 am
  #15  
BE Enthusiast
 
Joined: Nov 2012
Posts: 822
Cook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond reputeCook_County has a reputation beyond repute
Default Re: Tax questions

Originally Posted by bobsmyuncle View Post
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).
It depends what visa / US tax residence status you have or elect to have. If you are US residents, UK bank and financial accounts are reportable next on your FBARs and Form 8938 for 2017.
Cook_County is offline  

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.