Transferring PHP to US bank accounts

[Ivoryguy36 0]

My Filipino fiance is currently still in PI.  We've just started the K-1 process.

 

Her brother is about to gift a fairly large sum of money to her in pesos.  She will likely be transferring most of the money to the US.

 

Need advice from someone who has been through this before about the best way to avoid scrutiny (from either government) and to get the best exchange rate and lowest fees.

 

For example, what kind of account should she open?  Would it be best to open an account in USD?

 

What government pitfalls should we watch out for? (taxes, restrictions, etc.)

 

Do we need to transfer the funds in steps?  How much each time?

 

Is there a bank that is more suited to these types of transactions?

 

Thanks for any advice or referrals.

 

[Crazy Cat 41,144]

1.  She opens a bank account in the US after arriving.

2.  She transfers money to the new account by bank wire.

 

Bank transfers are not taxed by the US....just pay the small bank transfer fees.

 

Edited December 26, 2019 by missileman

[Crazy Cat 41,144]

***Topic moved to the Philippines regional discussion area****** 

[Just Paul 4,594]

Open the account in PI.   Deposit the funds.  Dollar denominated is easier, one less step of currency conversion.

 

Then wire transfer the balance into a US account.

 

That is what we did.  It took a few days to go thru.  Do it a few weeks before leaving if possible.

 

 

[RT&MB 27]

Agreed - BDO has dollar accounts.  If I recall it's about $35 to transfer in dollars vs about $130 to transfer in pesos.  The amount transferred doesn't matter, it's a flat rate.  Transfers of 10K or greater have to be reported to the US Government.  

 

On a side note - Even if you come into the bank with cash money in pesos and they convert it to dollars for you - there is about a 2 week delay between their acceptance of the deposit until it appears in your dollar account. 

 

Transfers are generally next business day if done before noon.  

[Hank_ 9,174]

4 hours ago, Ivoryguy36 said:

My Filipino fiance is currently still in PI.  We've just started the K-1 process.

 

Her brother is about to gift a fairly large sum of money to her in pesos.  She will likely be transferring most of the money to the US.

 

Need advice from someone who has been through this before about the best way to avoid scrutiny (from either government) and to get the best exchange rate and lowest fees.

 

For example, what kind of account should she open?  Would it be best to open an account in USD?

 

What government pitfalls should we watch out for? (taxes, restrictions, etc.)

 

Do we need to transfer the funds in steps?  How much each time?

 

Is there a bank that is more suited to these types of transactions?

 

Thanks for any advice or referrals.

 

 

Opening a bank acct, PHP, and deposit the funds is the 1st step.   Doubt she will be able to open a USD acct  (there are restrictions, have to check with the bank you choose)    

 

Next would be a wire transfer to a U.S. bank account.  As for exchange rate check with the bank, usually they are pretty good rates.   Wire transfer costs were $55 last time we did it.    No limit on the amount transferred

 

There shouldn't be any issues, government-wise with completing the wire transfer.

 

 

[Ivoryguy36 0]

1 hour ago, Hank_ said:

 

Opening a bank acct, PHP, and deposit the funds is the 1st step.   Doubt she will be able to open a USD acct  (there are restrictions, have to check with the bank you choose)    

 

Next would be a wire transfer to a U.S. bank account.  As for exchange rate check with the bank, usually they are pretty good rates.   Wire transfer costs were $55 last time we did it.    No limit on the amount transferred

 

There shouldn't be any issues, government-wise with completing the wire transfer.

 

 

Thanks for all the replies so far.

 

I think you have to have a US Social Security number or ITIN to open an account in the US.  You have to have a US address (and proof) to get an ITIN.  Sounds pretty hard to do before you get to the country.  If she wires the money, she'll have to do it before she leaves the Philippines and she'll have to send it to my account before she gets here.  I can think of a few reasons this could get complicated.  

[Hank_ 9,174]

17 minutes ago, Ivoryguy36 said:

Thanks for all the replies so far.

 

I think you have to have a US Social Security number or ITIN to open an account in the US.  You have to have a US address (and proof) to get an ITIN.  Sounds pretty hard to do before you get to the country.  If she wires the money, she'll have to do it before she leaves the Philippines and she'll have to send it to my account before she gets here.  I can think of a few reasons this could get complicated.  

She can deposit it into your account, and then later you transfer it.   Nothing complicated with that.      Simply add her name to your acct once she is in there (<< this is good for ROC a couple years down the line), and open her own acct while at it, if wanted.  

[JE57 239]

Note not sure how much you consider a large sum.  But there is a donor's tax in the Philippines for amounts in excess of 250K pesos doesn't matter the relationship between the donor and the receiver.    My wife maintains a BDO account in the Philippines even though she lives outside the Philippines and she could initiate a transfer from that account.   Also BDO has an association with Wells Fargo (Not sure of the details) so that might be something to look into.   You might want to consider Paypal ?   My wife and I have done it the other way from here to P.I. but she had bank accounts on both sides

[Hank_ 9,174]

The donor tax only applies if between two or more people .. transfering money to yourself doesn't apply.    With that said the donor tax is nasty .. 30%

 

 

[ADW & JOP 146]

4 hours ago, Hank_ said:

The donor tax only applies if between two or more people .. transfering money to yourself doesn't apply.    With that said the donor tax is nasty .. 30%

 

 

May or may not be relevant to you, but transferring of money to US citizen spouse is not subject to donor tax because of the unlimited marriage deduction. Transfer of money to non-US citizen spouse, however, is not covered by the unlimited marriage deduction.

[Ivoryguy36 0]

On 1/31/2020 at 11:11 AM, ADW & JOP said:

May or may not be relevant to you, but transferring of money to US citizen spouse is not subject to donor tax because of the unlimited marriage deduction. Transfer of money to non-US citizen spouse, however, is not covered by the unlimited marriage deduction.

I would like to know where you get this information.  Googling produced this website:

https://taxacctgcenter.ph/overview-of-donors-tax-in-the-philippines/

 

Which states nothing about marriage exemption except spouse can transfer up to 10,000 php without paying the tax.  

 

There is so much conflicting and outdated information out there that Google serves up, and many website articles have no date!

 

This donor tax is a huge concern.  This transaction is millions of pesos.  Her brother is intending to donate the funds to her from the proceeds of the sale of a house.  There is an attorney involved, so I hope the brother is being properly advised as he will be the one to owe the tax!

[ADW & JOP 146]

3 minutes ago, Ivoryguy36 said:

I would like to know where you get this information.  Googling produced this website:

https://taxacctgcenter.ph/overview-of-donors-tax-in-the-philippines/

 

Which states nothing about marriage exemption except spouse can transfer up to 10,000 php without paying the tax.  

 

There is so much conflicting and outdated information out there that Google serves up, and many website articles have no date!

 

This donor tax is a huge concern.  This transaction is millions of pesos.  Her brother is intending to donate the funds to her from the proceeds of the sale of a house.  There is an attorney involved, so I hope the brother is being properly advised as he will be the one to owe the tax!

It's not a big deal if it's under 155000 USD annually, but it may be something to consider if you are buying property for example.

 

https://blog.massmutual.com/post/married-to-a-non-citizen-3-estate-planning-traps

Edited February 1, 2020 by ADW & JOP

[Ivoryguy36 0]

39 minutes ago, Ivoryguy36 said:

I would like to know where you get this information.  Googling produced this website:

https://taxacctgcenter.ph/overview-of-donors-tax-in-the-philippines/

 

Which states nothing about marriage exemption except spouse can transfer up to 10,000 php without paying the tax.  

 

There is so much conflicting and outdated information out there that Google serves up, and many website articles have no date!

 

This donor tax is a huge concern.  This transaction is millions of pesos.  Her brother is intending to donate the funds to her from the proceeds of the sale of a house.  There is an attorney involved, so I hope the brother is being properly advised as he will be the one to owe the tax!

It appears that the TRAIN law that took effect on January 1, 2018 completely flattened the tax and removed the differentiation between relatives and strangers.  The donor tax is now a flat 6% of amounts over 250,000 php, and you owe the same for gifts to strangers or relatives INCLUDING spouses.  

 

The answer to the dilemma is that she has to transfer the money to herself only from a PHP account in her name to a USD account  at a US bank in her name.  Then no donor tax applies.  If my name is on the account, it could be considered a 50% gift triggering the tax.  Once the money is in the US, then US laws apply.

[ADW & JOP 146]

31 minutes ago, Ivoryguy36 said:

It appears that the TRAIN law that took effect on January 1, 2018 completely flattened the tax and removed the differentiation between relatives and strangers.  The donor tax is now a flat 6% of amounts over 250,000 php, and you owe the same for gifts to strangers or relatives INCLUDING spouses.  

 

The answer to the dilemma is that she has to transfer the money to herself only from a PHP account in her name to a USD account  at a US bank in her name.  Then no donor tax applies.  If my name is on the account, it could be considered a 50% gift triggering the tax.  Once the money is in the US, then US laws apply.

I've not personally reviewed the TRAIN law and don't know who of the two of you is the US citizen spouse.

 

My understanding of the unlimited marriage deduction is money going towards the US citizen spouse is covered under the unlimited marital deduction but not the other way.

 

Here is another link, and I will quote the relevant passage here. The limit was 152000 in 2018 hence the difference in number.

 

Marital deduction

Transfer to US citizen spouse: unlimited marital deduction for gift and estate tax Transfer to non-US citizen spouse: transfers of up to $152,000/year not subject to gift tax (for estate tax, no marital deduction unless assets are left to a QDOT)

 

 

Edit: I see where the misunderstanding is. I was specifically referring to US taxes, not the Philippines. My apologies for the misunderstanding.

 

Edited February 1, 2020 by ADW & JOP