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UK and US bank account

UK and US bank account

Old Jun 17th 2020, 9:32 am
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Default UK and US bank account

Hello all

My spouse is an American citizen and we're planning on moving with our 2 year old to Florida (for 11 months of the year) from Hertfordshire, UK.

I am just wondering, can I hold a UK bank account at the same time as holding a US one? This is due to my share-dividend income which I receive from a UK broker that is not allowed through a US account. I'm assuming it should be allowed as it's the same as owning a UK business but living in the US such as Alan Sugar does.

Secondly, can I send money from a UK bank account to a US one in the same way as a PAYE? I know that is a purely financial question.

Many thanks!
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Old Jun 17th 2020, 9:40 am
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Default Re: UK and US bank account

Hi, and welcome to BE.

You'll need to check with your UK bank, some don't allow non-residents to hold a bank account, but it seems to depend on each individual case, so you'll need to speak to your bank. Odd that you can't get your share income in to a US account, but perhaps somebody in the know will be able to suggest a way around that if you can't keep your UK account. Maybe one in a third country?

And yes, it's fine to transfer money from a UK bank account to a US one. Once you've got your 'green card', you'll be able to open up a US bank account and transfer freely, although a lot of people recommend a company such as Transferwise instead, to reduce charges.

HTH, best of luck with the application & move.
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Old Jun 17th 2020, 11:22 am
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Default Re: UK and US bank account

While you can hold a UK bank account while being a US resident, you need to be aware that you open yourself up to a more complicated tax situation which will likely require a tax professional to be done correctly.

Not only are we talking about FBAR, but if you have UK income and are a US tax resident then that will have to be declared and taxed accordingly.
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Old Jun 17th 2020, 12:26 pm
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Default Re: UK and US bank account

I have a UK bank account. They send correspondence to my US mailing address. I use XE to transfer money between my UK and US accounts.
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Old Jun 17th 2020, 12:46 pm
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Default Re: UK and US bank account

Originally Posted by Peatson View Post
Secondly, can I send money from a UK bank account to a US one in the same way as a PAYE? I know that is a purely financial question.
PAYE is a system for collecting tax in the UK. So I'm not sure what you mean by this question?

You can transfer money from a UK Bank account to a US one easily e.g. using Transferwise. But this has nothing to do with PAYE.
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Old Jun 17th 2020, 1:16 pm
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Default Re: UK and US bank account

I agree with the answers above regarding holding UK and US bank accounts and transfers between them. When we moved to the USA in 1987 we kept our UK bank account and correspondence was via mail and phone. The internet made things a lot easier in the ‘90s. Now that we are back in the UK we use the same bank plus also kept a US bank. A year before moving back I checked with our US bank and found that they did not allow overseas customers so we switched to a large bank that does support overseas customers.

Also as mentioned above the account details and max values will need to be reported as part of FBAR if the balances get high enough plus any UK income is subject to US taxation.
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Old Jun 17th 2020, 2:54 pm
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Default Re: UK and US bank account

Many major UK banks will allow you to have an account while resident in the USA. If your current bank does not then open one with the National Westminster before you move, they allow it. Probably best to do it before you move or become a US citizen if you are planning on that.

Totally agree with previous comments about using XE.com or Transferwise to exchange from GBP to USD (or vice versa). It is a bit of a pain to open an account but they will offer significantly better exchange rates and make it worth the trouble.

As previous poster noted having a bank account or income outside of the USA does open you up to more stringent tax reporting. Filling in the FBAR and information required on your tax return on Form 8938 is tedious but very doable without a tax professional who will want an arm and a leg to complete them for you.

Now if your shares are in an OEIC, Index Fund, ETF, Investment Trust or any other kind of pooled investment fund then you should sell them BEFORE you move here and reinvest the proceeds in US equivalents, what they call mutual funds. The reason is that the tax consequences of selling foreign funds are horrific, and apply to all profits you made from the sale regardless of when you bought them, or where you lived when you bought and held them. The tax rates are not your normal capital gains rates. They start at the highest published income tax rate (regardless of your personal rate) which is currently 39%, add on your state tax capital gains rate, and then interest at IRS rates for every year you held the fund regardless of whether or not you lived here in those years. You will quickly find that you lose way more than 50% of your profit, versus the normal capital gains rate of 15% or 20% for US Mutual funds. Holding shares directly in a foreign company is excluded from these regulations, for example Royal Dutch Shell, SmithGlaxoKline, etc. In short it needs to be a company that actually does something versus pooling your money with others and then buying shares. Not fair, but it is what it is and the penalties for non compliance are horrific.



Last edited by Glasgow Girl; Jun 17th 2020 at 3:06 pm.
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Old Jun 17th 2020, 3:12 pm
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Default Re: UK and US bank account

Originally Posted by Glasgow Girl View Post
Now if your shares are in an OEIC, Index Fund, ETF, Investment Trust or any other kind of pooled investment fund then you should sell them BEFORE you move here and reinvest the proceeds in US equivalents, what they call mutual funds.
I wholeheartedly agree, but rather than buying mutual funds in the USA I would suggest ETF's which are similar, slightly lower fees, and many are also HMRC Reporting which means that if you ever do move back then they get the favorable tax treatment you'd expect on stock dividends and capital gains. If you buy or sell mutual fund shares you get the share price at the end of the trading day but if you buy their ETF equivalent you get the price at the time you choose to buy or sell.

https://www.gov.uk/government/public...eporting-funds



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