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Transferring large amounts of money UK -> US

Transferring large amounts of money UK -> US

Old Jan 4th 2010, 9:26 pm
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Default Transferring large amounts of money UK -> US

Hey guys,

I was hoping someone would be able to help me out with some info here.

I'm looking to transfer around 120k pounds from the UK to the US and am trying to find the cheapest way to do it.

It seems that an FX Broker may well be the best deal, but the fees would look to be around $12,000 for that amount of money

So, does anyone have any experience transferring large sums of money and what did you find to be the cheapest way to do it?

Also, the money will ultimately be an inheritance but at the moment it's a gift from my mother (in other words, she's loaning me the money in advance of what I will inherit from my grandparents, if that makes any sense). Is it subject to US taxes?

TIA for any help you can give!!
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Old Jan 4th 2010, 10:34 pm
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Default Re: Transferring large amounts of money UK -> US

Originally Posted by Wintersong View Post
Hey guys,

I was hoping someone would be able to help me out with some info here.

I'm looking to transfer around 120k pounds from the UK to the US and am trying to find the cheapest way to do it.

It seems that an FX Broker may well be the best deal, but the fees would look to be around $12,000 for that amount of money

So, does anyone have any experience transferring large sums of money and what did you find to be the cheapest way to do it?

Also, the money will ultimately be an inheritance but at the moment it's a gift from my mother (in other words, she's loaning me the money in advance of what I will inherit from my grandparents, if that makes any sense). Is it subject to US taxes?

TIA for any help you can give!!
twenty or thirty dollars is all I pay for transfers of that size. Less if I use HSBC. Talk to a taxman about your gift. You will many wrong answers about tax liability of foreign gifts.
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Old Jan 4th 2010, 10:39 pm
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Default Re: Transferring large amounts of money UK -> US

Originally Posted by Wintersong View Post
Hey guys,

I was hoping someone would be able to help me out with some info here.

I'm looking to transfer around 120k pounds from the UK to the US and am trying to find the cheapest way to do it.

It seems that an FX Broker may well be the best deal, but the fees would look to be around $12,000 for that amount of money

So, does anyone have any experience transferring large sums of money and what did you find to be the cheapest way to do it?

Also, the money will ultimately be an inheritance but at the moment it's a gift from my mother (in other words, she's loaning me the money in advance of what I will inherit from my grandparents, if that makes any sense). Is it subject to US taxes?

TIA for any help you can give!!
XE Trade (or similar) for the transfer - don't use your bank!

But you want to look carefully into the tax issue - particularly whether it could ultimately be seen as a means of evading inheritance tax (which is payable by the estate, not the person who inherits). So please take professional advice on this (though as an initial step you could ask at the Tax Boards at UK-yankee and/or the Motley Fool (www.fool.co.uk).
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Old Jan 4th 2010, 10:41 pm
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Default Re: Transferring large amounts of money UK -> US

Originally Posted by bruceba View Post
twenty or thirty dollars is all I pay for transfers of that size. Less if I use HSBC. Talk to a taxman about your gift. You will many wrong answers about tax liability of foreign gifts.
Gifts are actually quite simple for the recipient.

Gifts are not income and are therefore not subject to US income tax.

The rules regarding the possible tax liabilities of the person making the gift are much more complicated (and I believe that is true of both the US and the UK although, of course, the specifics are completely different), but that is not the OP's question.
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Old Jan 4th 2010, 10:43 pm
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Default Re: Transferring large amounts of money UK -> US

Originally Posted by md95065 View Post
.....The rules regarding the possible tax liabilities of the person making the gift are much more complicated (and I believe that is true of both the US and the UK although, of course, the specifics are completely different), but that is not the OP's question.
Hm. I imagine that Wintersong does care about whether her mother or grandmother gets on the wrong side of the taxman...
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Old Jan 4th 2010, 10:54 pm
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Default Re: Transferring large amounts of money UK -> US

Originally Posted by Elvira View Post
Hm. I imagine that Wintersong does care about whether her mother or grandmother gets on the wrong side of the taxman...
In which case they need UK tax advice not US tax advice.

Actually I looked at this a few years ago when my mother sold her house and gave 1/3 of the proceeds to each of my sister and myself and determined that, because her total estate was less than the threshold for inheritance tax, there would be no adverse implications even if she had died within 7 years of making the gift.

There is a reasonably clear explanation of the UK inheritance tax here.

Last edited by md95065; Jan 4th 2010 at 10:57 pm.
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Old Jan 4th 2010, 10:57 pm
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Default Re: Transferring large amounts of money UK -> US

We use UKForex for our transfers. Flat fee of GBP7 for transfers less than 3K Sterling and no fee for transfers higher than that, and they seem to give a fair and competitive rate.

We'll be using them to transfer the money from the sale of our house.
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Old Jan 4th 2010, 11:16 pm
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Default Re: Transferring large amounts of money UK -> US

Originally Posted by Wintersong View Post
I'm looking to transfer around 120k pounds from the UK to the US and am trying to find the cheapest way to do it.

It seems that an FX Broker may well be the best deal, but the fees would look to be around $12,000 for that amount of money
6-7%? Wow, what a rip-off.

UKforex.co.uk charges no fees and give you an exchange rate of within 2 cents (1%-ish) of the live rate.

I use them frequently and they are the dog's danglers.

{Edit}

I just logged in to put the figures in for you, results as follows:

Source amount = GBP 120,000
Rate = USD 1.6026 per GBP 1.00
Destination amount = $192,312.00

Current live rate = USD 1.6114 per BP 1.00

1.6114-1.6026 = 0.0118 cents (difference between quoted exchange rate and live exchange rate)

0.0118 / 1.6114 = 0.0073228 (proportion that's shaved off, compared to the total amount)

So the 'fees' (they slice a sliver off the exchange rate to make their money) work out at 0.73%, or in other words they keep £878.74 of your £120k.

Sound more like a plan?

The receiving bank may or may not charge a nominal 'wire fee', but it's usually a one-off flat fee (like $15), not a percentage.

Last edited by BritishGuy36; Jan 4th 2010 at 11:28 pm.
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Old Jan 5th 2010, 1:17 am
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Default Re: Transferring large amounts of money UK -> US

Originally Posted by md95065 View Post
Gifts are actually quite simple for the recipient.

Gifts are not income and are therefore not subject to US income tax.

The rules regarding the possible tax liabilities of the person making the gift are much more complicated (and I believe that is true of both the US and the UK although, of course, the specifics are completely different), but that is not the OP's question.
Though doesn't that depend on if the recipient is a USC or not?

Anyway, xe.com or hifx.com would be worth looking into.
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Old Jan 5th 2010, 1:24 am
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Default Re: Transferring large amounts of money UK -> US

Originally Posted by Bob View Post
Though doesn't that depend on if the recipient is a USC or not?
Not as far as I know.

The fundamental point is that, as far as the US is concerned, a gift is not "income" and is therefore not subject to income tax. That being the case I don't see why it would matter whether or not the recipient was a USC.
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Old Jan 5th 2010, 1:37 am
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Default Re: Transferring large amounts of money UK -> US

Originally Posted by md95065 View Post
....That being the case I don't see why it would matter whether or not the recipient was a USC.
Because being a USC has advantages over a LPR, better being a USC and getting inheritance for example.

And I thought you couldn't only gift so much money with out there being a tax burden, somewhere in my mind I thought it was in the $100K range, which this would be more than. Could all be rubbish though, but worth double checking and more hassle than the actual money transfer.
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Old Jan 5th 2010, 2:17 am
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Default Re: Transferring large amounts of money UK -> US

Originally Posted by Bob View Post
Because being a USC has advantages over a LPR, better being a USC and getting inheritance for example.
But since the money isn't income it just doesn't enter into the income tax equation at all!

And I thought you couldn't only gift so much money with out there being a tax burden, somewhere in my mind I thought it was in the $100K range, which this would be more than. Could all be rubbish though, but worth double checking and more hassle than the actual money transfer.
Yes, there are limits on giving (which are complicated - and different in the US and the UK) but not on receiving.
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Old Jan 5th 2010, 12:43 pm
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Default Re: Transferring large amounts of money UK -> US

Originally Posted by md95065 View Post
Gifts are actually quite simple for the recipient.

Gifts are not income and are therefore not subject to US income tax.
Just to stir things up even more....

Is it a gift?

Originally Posted by Wintersong View Post
Also, the money will ultimately be an inheritance but at the moment it's a gift from my mother (in other words, she's loaning me the money in advance of what I will inherit from my grandparents, if that makes any sense).
This suggests it is a loan which will eventually be repaid from the inheritance. So, taxes (whether UK or US) will eventually have to be paid on the full value of the inheritance, some of the net value of which will then be used to repay the loan?

Suspect tax implications on this are a matter for professionals, and indeed some estate planning expertise could be useful to avoid a costly mistake!
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Old Jan 5th 2010, 1:13 pm
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Default Re: Transferring large amounts of money UK -> US

If you have that much money - it might be worth talking to HSBC about a premier account and asking them what it would cost to transfer it to dollars.

HSBC premier account requires £50k+ IIRC
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Old Jan 5th 2010, 1:14 pm
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Default Re: Transferring large amounts of money UK -> US

Originally Posted by BritishGuy36 View Post
6-7%? Wow, what a rip-off.

UKforex.co.uk charges no fees and give you an exchange rate of within 2 cents (1%-ish) of the live rate.

I use them frequently and they are the dog's danglers.

{Edit}

I just logged in to put the figures in for you, results as follows:

Source amount = GBP 120,000
Rate = USD 1.6026 per GBP 1.00
Destination amount = $192,312.00

Current live rate = USD 1.6114 per BP 1.00

1.6114-1.6026 = 0.0118 cents (difference between quoted exchange rate and live exchange rate)

0.0118 / 1.6114 = 0.0073228 (proportion that's shaved off, compared to the total amount)

So the 'fees' (they slice a sliver off the exchange rate to make their money) work out at 0.73%, or in other words they keep £878.74 of your £120k.

Sound more like a plan?

The receiving bank may or may not charge a nominal 'wire fee', but it's usually a one-off flat fee (like $15), not a percentage.
That's gonna be tough to beat anywhere!!
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