Transferring Pounds to Dollars

[LN1Casey 14]

So my husband has some cash that he wants to convert from Pounds Sterling to US Dollars.  Is there a process to do this would paying an arm and leg to conversion brokers? Edit: It's about 30k. So not too much, but not a small amount either.  

Edited September 16, 2022 by LN1Casey

[Boiler 45,731]

Bank

 

Loads of other on line services.

[LN1Casey 14]

2 minutes ago, Boiler said:

Bank

 

Loads of other on line services.

Like going into a UK bank and having them directly wire it to an US one? An online service? Does it have to be the same person on each side of the bank account (eg, Husband's UK bank sent to a US bank with Husband's details on it)? 

[JeanneAdil 6,581]

Bank

 

make sure if you bring a large amount thru customs ,,  you have proof (statements )  showing where it came from

 

Many U.S. banks will exchange USD for foreign currencies without charging a fee, but there are often stipulations. For instance, Bank of America customers can exchange foreign currencies for free, but only on orders of $1,000 or more. Otherwise, the bank charges a $7.50 delivery fee for foreign currency orders.May 13, 2022

Edited September 16, 2022 by JeanneAdil

[Boiler 45,731]

4 minutes ago, LN1Casey said:

Like going into a UK bank and having them directly wire it to an US one? An online service? Does it have to be the same person on each side of the bank account (eg, Husband's UK bank sent to a US bank with Husband's details on it)? 

Like logging into your UK Bank account and transferring funds to your US Bank account. Well does not have to be yours, a US Bank account.

 

You can check for rates and costs and use an online service instead, loads of those.

 

[meladee 160]

I've used the website Wise (formerly Transferwise) for large sums between US, UK, and Australia and it has always been quick and relatively cheap.

[Wuozopo 4,293]

@LN1Casey
 

I use the online company Wise, formerly Transferwise. They give quotes to let you know the costs. And you can ask your bank for costs to compare. There’s fees and there’s exchange rates to evaluate your final cost. Some may tout no fees but give a less favorable exchange rate.

Edited September 17, 2022 by Wuozopo

[LN1Casey 14]

So I talked with my husband, and we decided to go with Wise since it had the best overall rates. He had to call his bank to allow the transfer, since it was a larger sum, and so did it during his lunch while I was asleep (timezone difference).

 

I woke up to a transfer from OFX. He was very proud of himself for saving us £8 in fees, and was oblivious to the £50 loss in final total due to the worse exchange rate. 

 

*sigh* At least it wasn't a bank, which probably would have been loss of a couple hundred £.

[Pat2021 43]

To add onto this topic, is there any amount that needs to be declared anywhere when transferring from our own UK accounts, via WISE, to US accounts?

[Wuozopo 4,293]

58 minutes ago, Pat2021 said:

To add onto this topic, is there any amount that needs to be declared anywhere when transferring from our own UK accounts, via WISE, to US accounts?

Anything exceeding $10k, the US Treasury wants to know about. It’s for building paper trails in case of money laundering and terrorist funding. The receiving US bank is required to report a $10k transaction. You personally do not report unless you bring it into the US in your pocket as cash. In that case there is no bank to make the report, so the person with the $10k cash fills out a form at customs.

Edited September 28, 2022 by Wuozopo

[Pat2021 43]

14 hours ago, Wuozopo said:

Anything exceeding $10k, the US Treasury wants to know about. It’s for building paper trails in case of money laundering and terrorist funding. The receiving US bank is required to report a $10k transaction. You personally do not report unless you bring it into the US in your pocket as cash. In that case there is no bank to make the report, so the person with the $10k cash fills out a form at customs.

Ah that makes sense thank you.

So even over $10k I don't have to do anything as the bank handles it?
Is there any tax implications / need to state it on next year's tax return?

[Wuozopo 4,293]

3 hours ago, Pat2021 said:

Ah that makes sense thank you.

So even over $10k I don't have to do anything as the bank handles it?
Is there any tax implications / need to state it on next year's tax return?

It would all be handled seamlessly by the bank. That’s their requirement imposed by the banking part of the Patriot Act following 9-11. It is not taxable money.  Even if you move large amounts of money between two US banks, the banks will report it for the records. 
 

There is a report to the government when you have foreign bank accounts exceeding $10k in total, whether you transfer it or keep it in the foreign country. It is known as FBAR (Foreign Bank and Financial Accounts). Again, it is not taxable money and it is not reported on the tax return. It is an online report that is due April 15 for the previous calendar year. Basically you give the financial institution name, address, account number, and highest balance on any one day of the year. So even if you closed the account or transferred most of the money out before the end of the year, you still report if you held more than $10k total any day during the year.

 

IRS page on FBAR https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar

 

And a general note on income tax. 
Money you have in the bank (US or abroad) in not income to be taxed. But if that account is paid interest during the year or stocks pay dividends during the tax year, those are considered income to be reported on the tax return—-only the interest or dividend earned in the tax year

[Pat2021 43]

Thank you, that's very informative!

[Wuozopo 4,293]

Regarding transferring your pounds—Have you considered how much the pound has fallen?  This chart shows how much less you get in dollars right now compared to the first of the year. It’s something else to consider if you don’t need the money in the US immediately. 

 

[LN1Casey 14]

14 hours ago, Wuozopo said:

Regarding transferring your pounds—Have you considered how much the pound has fallen?  This chart shows how much less you get in dollars right now compared to the first of the year. It’s something else to consider if you don’t need the money in the US immediately.

My husband and I have already transferred the cash. We got 1.132 as the exchange rate, so right as it started to dip but not by much. I did the reverse calculations when it was about 1.08--if we sent the money back, we'd get an extra £200. But we didn't want to play with it, so we just kept it in $.

Edited September 30, 2022 by LN1Casey
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