UK pension transfer to USA
#31
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Joined: Aug 2013
Location: Athens GA
Posts: 2,132
Re: UK pension transfer to USA
So I just got an e-mail from Transferwise: "..in the UK and EEA all of the Borderless accounts are kept within safeguarding accounts within Barclay's bank. This differs for each region, depending on where you live in the world.
In the United States, the funds ... are kept within safeguarding accounts with Wells Fargo. This is regardless of the currency that you're holding your funds in."
This still leaves me with a lot of questions, including the need to know where they are for FBAR/8938 purposes and the nature of that "safeguarding".
nearpost1 - I believe that, because you live in the USA, your funds are probably with Wells Fargo, assuming your US address is what you registered with Transferwise.
In the United States, the funds ... are kept within safeguarding accounts with Wells Fargo. This is regardless of the currency that you're holding your funds in."
This still leaves me with a lot of questions, including the need to know where they are for FBAR/8938 purposes and the nature of that "safeguarding".
nearpost1 - I believe that, because you live in the USA, your funds are probably with Wells Fargo, assuming your US address is what you registered with Transferwise.
#32
Re: UK pension transfer to USA
I have used Transferwise for some time now as a currency exchange without any second thoughts. I have a Transferwise borderless account for convenience, but any monies I keep in the UK is in a Natwest account. If I didn't have access to a UK High St bank and with the exchange rate as it is, and likely to be for some considerable time, I would be communicating with Transferwise directly to find out if the account is insured.
#34
Forum Regular
Joined: Jun 2012
Location: Seattle
Posts: 90
Re: UK pension transfer to USA
So I just got an e-mail from Transferwise: "..in the UK and EEA all of the Borderless accounts are kept within safeguarding accounts within Barclay's bank. This differs for each region, depending on where you live in the world.
In the United States, the funds ... are kept within safeguarding accounts with Wells Fargo. This is regardless of the currency that you're holding your funds in."
This still leaves me with a lot of questions, including the need to know where they are for FBAR/8938 purposes and the nature of that "safeguarding".
nearpost1 - I believe that, because you live in the USA, your funds are probably with Wells Fargo, assuming your US address is what you registered with Transferwise.
In the United States, the funds ... are kept within safeguarding accounts with Wells Fargo. This is regardless of the currency that you're holding your funds in."
This still leaves me with a lot of questions, including the need to know where they are for FBAR/8938 purposes and the nature of that "safeguarding".
nearpost1 - I believe that, because you live in the USA, your funds are probably with Wells Fargo, assuming your US address is what you registered with Transferwise.
thats quite remarkable as a i always assumed the money was still in the U.k. where it would remain until I transferred it. Of course no actual transfer would occur at that time as TWise would simply send me some u.s. dollars from the u.s. side of the
pond.
anyway I shall await T wises response to my fraud concerns
#35
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Joined: Jun 2012
Location: Seattle
Posts: 90
Re: UK pension transfer to USA
up till now it was my intention to do fbar reporting and also the irs tax form “8000”something or other. Now, based on mid atlantic’s Thoughts, I’m wondering if the money is actually in the U.K. to begin with . Hmm
#36
Re: UK pension transfer to USA
The account has a London address, a UK sort code and account number. Regardless of where the money physically is, it might be well nigh impossible to convince the US authorities it isn't in the UK. I plan to report it as if it is UK account and save a potential argument.
#37
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Joined: Jun 2012
Location: Seattle
Posts: 90
Re: UK pension transfer to USA
The account has a London address, a UK sort code and account number. Regardless of where the money physically is, it might be well nigh impossible to convince the US authorities it isn't in the UK. I plan to report it as if it is UK account and save a potential argument.
Lansbury
#38
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Joined: Aug 2013
Location: Athens GA
Posts: 2,132
Re: UK pension transfer to USA
The account has a London address, a UK sort code and account number. Regardless of where the money physically is, it might be well nigh impossible to convince the US authorities it isn't in the UK. I plan to report it as if it is UK account and save a potential argument.
https://transferwise.com/help/articl...y-money-stored
Like you, if I had reportable sums I would declare them anyway, because that is far easier than any dispute about where the funds are located. It also begs the question whether Transferwise does FACTA reporting anyway.
#39
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Joined: Apr 2011
Location: The Shire
Posts: 1,117
Re: UK pension transfer to USA
From the UK site:
"Will you report my transfers to the tax authorities?
TransferWise Limited is a UK company authorised by the Financial Conduct Authority as an Electronic Money Institution. We are still evaluating the impact of the Common Reporting Standards, including FATCA, to our business and how we will adopt the new requirements. At this time we are not reporting this information to HMRC or any other tax authority.
Who do I have to report my taxes to?
Customers are required to disclose and pay any necessary taxes associated with transfers made through our systems.
The triggering of a tax liability and/or reporting obligation will depend on your tax residency, the nature of the income/gains and potentially the amount. We recommend you seek tax advice if you are unclear on the implications of a specific transaction.
Please note - The above information is based on UK tax law, so you may need to check this information with your own tax authority if you have any more specific questions."
https://transferwise.com/help/articl...counts-and-tax
[bold mine]
I'm guessing here........but assume a user account registered in the UK falls under UK Authority. An individual's account (in the individuals name) would be covered, in case of failure, for £85,000; but what is the coverage of funds held in a client account (in the entities name, held as one whole amount including proceeds from all clients combined). Is coverage of a client account the same as for an individual account or are there separate rules? If the user account is registered in the US, then FDIC rules would apply for individual and entity accounts. As with US banks having UK/EU operations, which authority does the user go to if a loss occurs when the funds are in the UK/EU system?... and, vice versa. If a US registered account has all funds which are deposited into the account from abroad sent immediately to the US, then it may not be a problem. IMHO.
"Will you report my transfers to the tax authorities?
TransferWise Limited is a UK company authorised by the Financial Conduct Authority as an Electronic Money Institution. We are still evaluating the impact of the Common Reporting Standards, including FATCA, to our business and how we will adopt the new requirements. At this time we are not reporting this information to HMRC or any other tax authority.
Who do I have to report my taxes to?
Customers are required to disclose and pay any necessary taxes associated with transfers made through our systems.
The triggering of a tax liability and/or reporting obligation will depend on your tax residency, the nature of the income/gains and potentially the amount. We recommend you seek tax advice if you are unclear on the implications of a specific transaction.
Please note - The above information is based on UK tax law, so you may need to check this information with your own tax authority if you have any more specific questions."
https://transferwise.com/help/articl...counts-and-tax
[bold mine]
I'm guessing here........but assume a user account registered in the UK falls under UK Authority. An individual's account (in the individuals name) would be covered, in case of failure, for £85,000; but what is the coverage of funds held in a client account (in the entities name, held as one whole amount including proceeds from all clients combined). Is coverage of a client account the same as for an individual account or are there separate rules? If the user account is registered in the US, then FDIC rules would apply for individual and entity accounts. As with US banks having UK/EU operations, which authority does the user go to if a loss occurs when the funds are in the UK/EU system?... and, vice versa. If a US registered account has all funds which are deposited into the account from abroad sent immediately to the US, then it may not be a problem. IMHO.
#40
Forum Regular
Joined: Jun 2012
Location: Seattle
Posts: 90
Re: UK pension transfer to USA
OAP
Thanks for info re reporting, which seems to support completing Fatca and the other irs form at tax time.
How or if my funds are protected from fraud still seems to be a murky issue only resolved if I immediately transfer funds over to my U.S. Bank is how I interpret the second part if your post.
Again, just to be clear, I live in the USA and registered with TWise while in the USA, using the only address I possess, an address in Washington State. However and this was the purpose of me opening the account, the money that is in the account came/comes from two British entities. The DWP, who make a transfer of my state pension every four weeks, and a London solicitor who mad a one time transfer to TWise from their Lloyd’s bank account in London. When I log into my TWise account it shows their address as Shoreditch London and my balance is in GBP. It is there that I also see a sort code and my a/c number.
I know you expressed uncertainty with questions marks regarding what protections, if any are in place for customers based in The U.K., but did I read the last part of your post correctly when you said that FDIC will insure my funds in my situation as I am a customer registered in the U.S.? Further, that they will protect me regardless of whether funds are in a personal account or entity account?
just wanted to clarify, thanks
Thanks for info re reporting, which seems to support completing Fatca and the other irs form at tax time.
How or if my funds are protected from fraud still seems to be a murky issue only resolved if I immediately transfer funds over to my U.S. Bank is how I interpret the second part if your post.
Again, just to be clear, I live in the USA and registered with TWise while in the USA, using the only address I possess, an address in Washington State. However and this was the purpose of me opening the account, the money that is in the account came/comes from two British entities. The DWP, who make a transfer of my state pension every four weeks, and a London solicitor who mad a one time transfer to TWise from their Lloyd’s bank account in London. When I log into my TWise account it shows their address as Shoreditch London and my balance is in GBP. It is there that I also see a sort code and my a/c number.
I know you expressed uncertainty with questions marks regarding what protections, if any are in place for customers based in The U.K., but did I read the last part of your post correctly when you said that FDIC will insure my funds in my situation as I am a customer registered in the U.S.? Further, that they will protect me regardless of whether funds are in a personal account or entity account?
just wanted to clarify, thanks
#41
Forum Regular
Joined: Jun 2012
Location: Seattle
Posts: 90
Re: UK pension transfer to USA
So I just got an e-mail from Transferwise: "..in the UK and EEA all of the Borderless accounts are kept within safeguarding accounts within Barclay's bank. This differs for each region, depending on where you live in the world.
In the United States, the funds ... are kept within safeguarding accounts with Wells Fargo. This is regardless of the currency that you're holding your funds in."
This still leaves me with a lot of questions, including the need to know where they are for FBAR/8938 purposes and the nature of that "safeguarding".
nearpost1 - I believe that, because you live in the USA, your funds are probably with Wells Fargo, assuming your US address is what you registered with Transferwise.
In the United States, the funds ... are kept within safeguarding accounts with Wells Fargo. This is regardless of the currency that you're holding your funds in."
This still leaves me with a lot of questions, including the need to know where they are for FBAR/8938 purposes and the nature of that "safeguarding".
nearpost1 - I believe that, because you live in the USA, your funds are probably with Wells Fargo, assuming your US address is what you registered with Transferwise.
#42
Forum Regular
Joined: Jun 2012
Location: Seattle
Posts: 90
Re: UK pension transfer to USA
Here is clarification for U.K. Residents:
TransferWise is an Electronic Money Institution and is required by law to keep your money safe by storing it in a low-risk financial institution (e.g. bank account). For example, for UK and European customers, your money is stored and safeguarded securely in our Barclays accounts in the UK.
This means that in the event that TransferWise were to become insolvent, your money is unaffected and will be refunded to you in full.
The main difference with the protection offered by TransferWise in comparison with a bank is that, because TransferWise is an Electronic Money Institution and not an official deposit taking Banking Institution, your money is not guaranteed by Financial Services Compensation Scheme (FSCS).
This means that in the event that the bank itself where we store the funds were to become insolvent, you may not be guaranteed the return of your funds, whereas you are normally guaranteed up to a value of 75-85k GBP with FSCS.
How is my money protected?
TransferWise is an Electronic Money Institution and is required by law to keep your money safe by storing it in a low-risk financial institution (e.g. bank account). For example, for UK and European customers, your money is stored and safeguarded securely in our Barclays accounts in the UK.
This means that in the event that TransferWise were to become insolvent, your money is unaffected and will be refunded to you in full.
The main difference with the protection offered by TransferWise in comparison with a bank is that, because TransferWise is an Electronic Money Institution and not an official deposit taking Banking Institution, your money is not guaranteed by Financial Services Compensation Scheme (FSCS).
This means that in the event that the bank itself where we store the funds were to become insolvent, you may not be guaranteed the return of your funds, whereas you are normally guaranteed up to a value of 75-85k GBP with FSCS.
#43
BE Forum Addict
Joined: Apr 2011
Location: The Shire
Posts: 1,117
Re: UK pension transfer to USA
Some interesting reading.
For the UK (and those registered in the UK):
For the firm:
"If something goes wrong when you use a money transfer firm or foreign exchange (FX) broker, you can’t use the same process to get your money back as you would with a bank.
All UK-based firms handling overseas money transfers must be either ‘authorised’ or ‘registered’ by the Financial Conduct Authority (FCA).
While authorisation means there are certain safeguards on your money, you still won’t be covered by the Financial Services Compensation Scheme (FSCS).
So if the firm you’re using fails and can’t pay back all the money it owes you, you won’t be able to get compensation through the scheme.
Firms authorised by the FCA need to safeguard your money by keeping it separate from company funds.
So if the firm goes bust, you are more likely to get your money back."
https://www.moneyadviceservice.org.u...money-overseas
Is TransferWise authorised?:
As they say, yes, they are.
https://register.fca.org.uk/shpo_sea...=3wq1nht7eg7tr
For the US (and those registered in the US): it gets a bit murkier.
The firm:
"TransferWise Inc. is registered with the Financial Crimes Enforcement Network (FinCEN) .....[the FBAR people - OAP comment]...... with money service business registration number 31000065314305. It is licensed as a money transmitter in the states listed here and supervised by regulatory authorities in each of those states.
In the United States, we bank with Community and Federal Savings Bank (CFSB), Cross River Bank (CRB) and Wells Fargo. All of these banks are insured under the Federal Deposit Insurance Corporation (FDIC)."
https://transferwise.com/help/articl...ated-in-the-us
So, one would need to research their particular state for what would happen if TW went bust.
For the UK (and those registered in the UK):
For the firm:
"If something goes wrong when you use a money transfer firm or foreign exchange (FX) broker, you can’t use the same process to get your money back as you would with a bank.
All UK-based firms handling overseas money transfers must be either ‘authorised’ or ‘registered’ by the Financial Conduct Authority (FCA).
While authorisation means there are certain safeguards on your money, you still won’t be covered by the Financial Services Compensation Scheme (FSCS).
So if the firm you’re using fails and can’t pay back all the money it owes you, you won’t be able to get compensation through the scheme.
Firms authorised by the FCA need to safeguard your money by keeping it separate from company funds.
So if the firm goes bust, you are more likely to get your money back."
https://www.moneyadviceservice.org.u...money-overseas
Is TransferWise authorised?:
As they say, yes, they are.
https://register.fca.org.uk/shpo_sea...=3wq1nht7eg7tr
For the US (and those registered in the US): it gets a bit murkier.
The firm:
"TransferWise Inc. is registered with the Financial Crimes Enforcement Network (FinCEN) .....[the FBAR people - OAP comment]...... with money service business registration number 31000065314305. It is licensed as a money transmitter in the states listed here and supervised by regulatory authorities in each of those states.
In the United States, we bank with Community and Federal Savings Bank (CFSB), Cross River Bank (CRB) and Wells Fargo. All of these banks are insured under the Federal Deposit Insurance Corporation (FDIC)."
https://transferwise.com/help/articl...ated-in-the-us
So, one would need to research their particular state for what would happen if TW went bust.
Last edited by theOAP; Oct 31st 2018 at 4:25 pm.
#44
Forum Regular
Joined: Jun 2012
Location: Seattle
Posts: 90
Re: UK pension transfer to USA
Thanks OAP, I will look into the rules for Washington State.
You know I’m sitting here, kicking myself, impossible I know, but I’m doing it figuratively. I keep on drifting away from my real concern. I’m not that worried that Wells Fargo will go bust, I would speculate that those with TWise accounts in the U.K. feel similarly confident about Barclays remaining solvent too.
What I’m waiting for Transferwise to explain to me is what happens if my money is stolen. The FDIC will not come to my rescue where fraud is concerned. If you have any thoughts on how fraud is handled I’d welcome them.
Thanks again OAP, and thanks to all the rest of you. It’s been enlightening to first learn that my money is not at TWise but at Barclays, and then subsequently to learn that it is not actually at Barclays either, but at Wells Fargo! � ����
You know I’m sitting here, kicking myself, impossible I know, but I’m doing it figuratively. I keep on drifting away from my real concern. I’m not that worried that Wells Fargo will go bust, I would speculate that those with TWise accounts in the U.K. feel similarly confident about Barclays remaining solvent too.
What I’m waiting for Transferwise to explain to me is what happens if my money is stolen. The FDIC will not come to my rescue where fraud is concerned. If you have any thoughts on how fraud is handled I’d welcome them.
Thanks again OAP, and thanks to all the rest of you. It’s been enlightening to first learn that my money is not at TWise but at Barclays, and then subsequently to learn that it is not actually at Barclays either, but at Wells Fargo! � ����
#45
Forum Regular
Joined: Jun 2012
Location: Seattle
Posts: 90
Re: UK pension transfer to USA
But my personal profile shows my home address in Washington State.Is your personal address a U.K. address or a U.S.A address?
Do these data points clear up the question as to which country holds my funds?
Last edited by nearpost1; Oct 31st 2018 at 10:17 pm.