Transferring money and tax questions
#1
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Joined: Jan 2004
Posts: 5
Transferring money and tax questions
I know this is probably an old chestnut but....
My endownment policy has matured in the UK and I want to move it to the US, it is about 24,000 sterling. Are there any tax implications in just transferring this money to my US bank.
Thanks for your help!
Keith
My endownment policy has matured in the UK and I want to move it to the US, it is about 24,000 sterling. Are there any tax implications in just transferring this money to my US bank.
Thanks for your help!
Keith
#2
Re: Transferring money and tax questions
There are no tax implications for just transferring the money to the USA if you are a USC or permanent resident. There may be if you are just a visa holder (H1, L1 etc.).
#4
Originally posted by TRPardoe
There is a US tax liability because it is income. All income is subject to tax here, n'est pas ?
There is a US tax liability because it is income. All income is subject to tax here, n'est pas ?
#5
I think that this is a really important post for anyone with finances in two countries. In the UK, an endowment is non-taxable, correct? So does/should the US disregard the non-taxable status if you choose to bring the money to the US (or not, as the case may be)? Same question applies to an ISA you may have paid into before leaving the UK.
I wasted $1500 on a financial consultant a couple of years ago. He kept pushing the Roth IRA on me - you know, the one that's paid with after-tax money, and is tax-exempt when you withdraw it during retirement? Naturally, I asked him, "What if I retire in the UK?" His response ("Oh, you shouldn't have to pay tax on it wherever you live") didn't inspire confidence (I didn't feel like he really knew). So, I asked him to show me the evidence. Of course, he never could.
The tax implications of being an expat are mind-boggling. And it seems that, unless you're talking about millions in investments, the cost of getting expert advice can be higher than the money it saves you!
I wasted $1500 on a financial consultant a couple of years ago. He kept pushing the Roth IRA on me - you know, the one that's paid with after-tax money, and is tax-exempt when you withdraw it during retirement? Naturally, I asked him, "What if I retire in the UK?" His response ("Oh, you shouldn't have to pay tax on it wherever you live") didn't inspire confidence (I didn't feel like he really knew). So, I asked him to show me the evidence. Of course, he never could.
The tax implications of being an expat are mind-boggling. And it seems that, unless you're talking about millions in investments, the cost of getting expert advice can be higher than the money it saves you!
#6
Originally posted by TRPardoe
There is a US tax liability because it is income. All income is subject to tax here, n'est pas ?
There is a US tax liability because it is income. All income is subject to tax here, n'est pas ?
The act of transferring the proceeds would not, ever, turn non-taxable funds into taxable income. :lecture:
#7
Originally posted by Pulaski
The act of transferring the proceeds would not, ever, turn non-taxable funds into taxable income. :lecture:
The act of transferring the proceeds would not, ever, turn non-taxable funds into taxable income. :lecture:
#8
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Joined: Jan 2004
Posts: 5
Getting confused now!
An earlier post said the tax implications of being an ex-pat are mind boggling - dead right. I'm really not looking forward to retirement and pension time! i.e. Stay in US and drag UK pension to US or retire to UK and do the reverse.
Something to consider: when we sold the house in the UK we got the money, and transferred it to US and then used to it to pay the deposit on the new house with no problems. We worked under the assumption that (at that time) you could make a one time profit on the sale of a house.
My big problem is what to do with the money, whether to just leave it in the UK and invest it somewhere, my financial advisor there didn't seem to keen on this for some reason because of not having residency status - or bring it over here and invest it and then pay taxes (of course) on the profits/interest.
Fun isn't it, not!
Keith
Something to consider: when we sold the house in the UK we got the money, and transferred it to US and then used to it to pay the deposit on the new house with no problems. We worked under the assumption that (at that time) you could make a one time profit on the sale of a house.
My big problem is what to do with the money, whether to just leave it in the UK and invest it somewhere, my financial advisor there didn't seem to keen on this for some reason because of not having residency status - or bring it over here and invest it and then pay taxes (of course) on the profits/interest.
Fun isn't it, not!
Keith
#9
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Thread Starter
Joined: Jan 2004
Posts: 5
Found this on the IRS site
Use this link...
http://www.irs.ustreas.gov/faqs/faq13-3.html
13.3 Aliens and U.S. Citizens Living Abroad: Foreign Income & Foreign Income Exclusion
What is foreign earned income? Is it income from a foreign source or income paid by a U.S. company while living abroad?
Earned income is pay for personal services performed, such as wages, salaries, or professional fees. Foreign earned income is income you receive for services you perform in a foreign country during a period when your tax home is in a foreign country and during which you meet either the bona fide residence test or the physical presence test. It does not matter whether earned income is paid by a U.S. employer or a foreign employer. Foreign earned income does not include the following amounts.
The previously excluded value of meals and lodging furnished for the convenience of your employer.
Pension or annuity payments including social security benefits.
Payments by the U.S. Government, or any U.S. government agency or instrumentality, to its employees.
Amounts included in your income because of your employer's contributions to a nonexempt employee trust or to a nonqualifying annuity contract.
Recaptured unallowable moving expenses
Payments received after the end of the tax year following the tax year in which you performed the services that earned the income.
http://www.irs.ustreas.gov/faqs/faq13-3.html
13.3 Aliens and U.S. Citizens Living Abroad: Foreign Income & Foreign Income Exclusion
What is foreign earned income? Is it income from a foreign source or income paid by a U.S. company while living abroad?
Earned income is pay for personal services performed, such as wages, salaries, or professional fees. Foreign earned income is income you receive for services you perform in a foreign country during a period when your tax home is in a foreign country and during which you meet either the bona fide residence test or the physical presence test. It does not matter whether earned income is paid by a U.S. employer or a foreign employer. Foreign earned income does not include the following amounts.
The previously excluded value of meals and lodging furnished for the convenience of your employer.
Pension or annuity payments including social security benefits.
Payments by the U.S. Government, or any U.S. government agency or instrumentality, to its employees.
Amounts included in your income because of your employer's contributions to a nonexempt employee trust or to a nonqualifying annuity contract.
Recaptured unallowable moving expenses
Payments received after the end of the tax year following the tax year in which you performed the services that earned the income.
#10
Re: Found this on the IRS site
Originally posted by kmorton1953
Use this link...
http://www.irs.ustreas.gov/faqs/faq13-3.html
13.3 Aliens and U.S. Citizens Living Abroad: Foreign Income & Foreign Income Exclusion
What is foreign earned income? Is it income from a foreign source or income paid by a U.S. company while living abroad?
Earned income is pay for personal services performed, such as wages, salaries, or professional fees. Foreign earned income is income you receive for services you perform in a foreign country during a period when your tax home is in a foreign country and during which you meet either the bona fide residence test or the physical presence test. It does not matter whether earned income is paid by a U.S. employer or a foreign employer. Foreign earned income does not include the following amounts.
The previously excluded value of meals and lodging furnished for the convenience of your employer.
Pension or annuity payments including social security benefits.
Payments by the U.S. Government, or any U.S. government agency or instrumentality, to its employees.
Amounts included in your income because of your employer's contributions to a nonexempt employee trust or to a nonqualifying annuity contract.
Recaptured unallowable moving expenses
Payments received after the end of the tax year following the tax year in which you performed the services that earned the income.
Use this link...
http://www.irs.ustreas.gov/faqs/faq13-3.html
13.3 Aliens and U.S. Citizens Living Abroad: Foreign Income & Foreign Income Exclusion
What is foreign earned income? Is it income from a foreign source or income paid by a U.S. company while living abroad?
Earned income is pay for personal services performed, such as wages, salaries, or professional fees. Foreign earned income is income you receive for services you perform in a foreign country during a period when your tax home is in a foreign country and during which you meet either the bona fide residence test or the physical presence test. It does not matter whether earned income is paid by a U.S. employer or a foreign employer. Foreign earned income does not include the following amounts.
The previously excluded value of meals and lodging furnished for the convenience of your employer.
Pension or annuity payments including social security benefits.
Payments by the U.S. Government, or any U.S. government agency or instrumentality, to its employees.
Amounts included in your income because of your employer's contributions to a nonexempt employee trust or to a nonqualifying annuity contract.
Recaptured unallowable moving expenses
Payments received after the end of the tax year following the tax year in which you performed the services that earned the income.
#11
Just Joined
Joined: Jul 2003
Location: Bodrum
Posts: 15
Re: Getting confused now!
Originally posted by kmorton1953
An earlier post said the tax implications of being an ex-pat are mind boggling - dead right. I'm really not looking forward to retirement and pension time! i.e. Stay in US and drag UK pension to US or retire to UK and do the reverse.
Something to consider: when we sold the house in the UK we got the money, and transferred it to US and then used to it to pay the deposit on the new house with no problems. We worked under the assumption that (at that time) you could make a one time profit on the sale of a house.
My big problem is what to do with the money, whether to just leave it in the UK and invest it somewhere, my financial advisor there didn't seem to keen on this for some reason because of not having residency status - or bring it over here and invest it and then pay taxes (of course) on the profits/interest.
Fun isn't it, not!
Keith
An earlier post said the tax implications of being an ex-pat are mind boggling - dead right. I'm really not looking forward to retirement and pension time! i.e. Stay in US and drag UK pension to US or retire to UK and do the reverse.
Something to consider: when we sold the house in the UK we got the money, and transferred it to US and then used to it to pay the deposit on the new house with no problems. We worked under the assumption that (at that time) you could make a one time profit on the sale of a house.
My big problem is what to do with the money, whether to just leave it in the UK and invest it somewhere, my financial advisor there didn't seem to keen on this for some reason because of not having residency status - or bring it over here and invest it and then pay taxes (of course) on the profits/interest.
Fun isn't it, not!
Keith