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UK bank account and pension in US enquiry

UK bank account and pension in US enquiry

Old Sep 24th 2023, 2:28 am
  #16  
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Default Re: UK bank account and pension in US enquiry

You pay tax on foreign currency gains when you trade USD for another currency and subsequently trade back to USD at a later date. Doing a one way trade of another currency into USD won’t be taxed (unless perhaps it is for commercial business transactions). Or, when you pay off a loan taken out in a foreign currency but paid back (in any currency including the original currency) while subject to US taxes, most commonly a mortgage. There is lots of information on foreign currency mortgage gains within this forum and you have already asked about that. You do not pay any extra tax for simply holding foreign currency, just ensure you declare it on the appropriate forms and declare and pay tax on all interest. It sounds like you have that in hand.

The website you are referring to sounds like one big scam to me (don’t post their details they don’t need any free advertising). It seems they are trying to scaremonger people into paying for consultations, and I would not do business with this company.

I have said before, it is excellent that you are researching all these issues and managing your assets for the best outcome, but at the same time I think you are over analyzing and taking many facts out of proportion. In other words you are are getting unnecessarily stuck in the weeds. In your case I would contact a good domestic CPA who has some experience of expats (most likely located in the bigger cities) and go through them to do your taxes. Now is the time to find someone well ahead of tax season which will pick up at the end of the year.

Last edited by Glasgow Girl; Sep 24th 2023 at 2:31 am.
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Old Sep 24th 2023, 5:02 am
  #17  
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Default Re: UK bank account and pension in US enquiry

Originally Posted by Helen1234
Hey Glassgow girl

I hope you are well. Recently, I went to some website. It says because you hold non-USD currency you may owe some tax because of the change of the currency. They gave the example, if you buy one very expensive sweater in the UK, the currncy gain may be over 200 USD. I have around 20k GBp in my UK accounts. I will use it when I am in UK or may transfer some to my husband to support the family. They are all originally GBP not USD. I assume I just ignore the website. They just want to ask you to do the consulation. I assume I just report my money to the 8939 and Fbar and pay the interests tax, right? I assume there are no extra tax because I hold non-usd money in the UK account.

Thanks,

Helen
This official IRS publication on the US tax treatment of foreign currency transactions may assist:Character of Exchange Gain or Loss (irs.gov)
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Old Sep 24th 2023, 5:25 am
  #18  
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Default Re: UK bank account and pension in US enquiry

Originally Posted by Glasgow Girl
You pay tax on foreign currency gains when you trade USD for another currency and subsequently trade back to USD at a later date. Doing a one way trade of another currency into USD won’t be taxed (unless perhaps it is for commercial business transactions). Or, when you pay off a loan taken out in a foreign currency but paid back (in any currency including the original currency) while subject to US taxes, most commonly a mortgage. There is lots of information on foreign currency mortgage gains within this forum and you have already asked about that. You do not pay any extra tax for simply holding foreign currency, just ensure you declare it on the appropriate forms and declare and pay tax on all interest. It sounds like you have that in hand.

The website you are referring to sounds like one big scam to me (don’t post their details they don’t need any free advertising). It seems they are trying to scaremonger people into paying for consultations, and I would not do business with this company.

I have said before, it is excellent that you are researching all these issues and managing your assets for the best outcome, but at the same time I think you are over analyzing and taking many facts out of proportion. In other words you are are getting unnecessarily stuck in the weeds. In your case I would contact a good domestic CPA who has some experience of expats (most likely located in the bigger cities) and go through them to do your taxes. Now is the time to find someone well ahead of tax season which will pick up at the end of the year.
Many thanks, Glassgow girl. Yeah, I think your previous reply was very clear and I will do what you said. It is just because the essay written by one CPA mentioned it in the website made me neverous. Sorry to disturb you again,

Helen
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