Keeping UK bank accounts open and transferring money

[inhopeofglory 0]

Hi,

I am soon to be moving to the US on my shiny new K-1 visa. :-) I'm definitely going to be keeping my bank account open here - I have a student loan to pay off, plus I've heard it's a real benefit to already have a UK bank account in the event that my soon-to-be-wife and I ever consider moving back here. I'm interested in the implications for our tax return every year, though.

Does anyone know whether it makes any difference how much is held within a foreign bank account? i.e. if I have less than, say, the equivalent of $5000 in the account back here, will we still have to declare/pay tax on it? I want to make the process as hassle-free as possible, while still retaining the advantages of a UK bank account - e.g. being able to use my debit card in the US while I wait for my SS number, and so on.

Also, is there any reason why I couldn't keep my bank account here open indefinitely? We'll be visiting the UK every couple of years or so, and my student loan's going to take something like 10 years to pay off. I'd rather keep the payments in sterling if possible.

Another thing is transferring the bulk of my funds over to the US. Is there any advantage to transferring them now, or can I wait until I am added to my fiancée's bank account once we're married? I have heard that US citizens can receive up to $10,000 per year as a gift without being taxed/having to declare it. If we wait until I'm added to the account will this limit still apply, considering it's just my money being moved to another of "my" accounts?

Thanks for the help.

Regards, inhopeofglory

[Lansbury 19]

If you have more than $10000 in foreign bank accounts you have to declare those accounts to the IRS by June each year. Does not mean anything other than they must be declared.

Any income from those accounts, interest, you declare on your normal tax return. Transfer you own UK funds to the US when the exchange rates is acceptable to you. They are your funds no tax will have to be paid just because you transfer them over.

I have kept my UK bank account open and other than remembering to send the form every June it has not been a problem.

[Nich-Nick 3,354]

I have heard that US citizens can receive up to $10,000 per year as a gift without being taxed/having to declare it. If we wait until I'm added to the account will this limit still apply, considering it's just my money being moved to another of "my" accounts?

You're not giving your money as a gift so that gift thing doesn't apply. You just transfer your money without any tax owed. When you deposit or withdraw over $10,000 from a bank or broker, the institution will report it. They are required to report it. It's the same when you enter the US, you have to declare if you have more than $10k in cash. They only want to keep track of large sums of money being moved around because of monitoring terrorist activities and money laundering. It's the banking part of the Patriot Act that was enacted after 9/11. It's just a paper trail and nothing to do with taxes.

[inhopeofglory 0]

You're not giving your money as a gift so that gift thing doesn't apply.

Technically, though, wouldn't it be classed as a gift if I transferred the money to my fiancée's account before moving over to the US and a) getting added to her account or B) opening an account in my name?

[*julez* 124]

You're not giving your money as a gift so that gift thing doesn't apply. You just transfer your money without any tax owed. When you deposit or withdraw over $10,000 from a bank or broker, the institution will report it. They are required to report it. It's the same when you enter the US, you have to declare if you have more than $10k in cash. They only want to keep track of large sums of money being moved around because of monitoring terrorist activities and money laundering. It's the banking part of the Patriot Act that was enacted after 9/11. It's just a paper trail and nothing to do with taxes.

Deposits or withdrawals in excess of $10,000 are reported only if the funds are taken in cash. Just want that to be clear. Furthermore, the Currency Transaction Reporting (CTR) regulations have been in effect since the enactment of the Bank Secrecy Act of 1970 - not just since 9/11.