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Tax guidelines and regulations for large money transfers into the UK

Your recipient may not need to pay, but you may need to file with the US.

Rhys Subitch
Rhys Subitch

Updated

Fact checked

Your recipient may avoid taxes on your money transfer depending on your nationality and where you live. Even so, it’s your job to report large amounts to the IRS — and you may be on the hook for a gift tax.

How the UK regulates large remittances

While the UK doesn’t charge a gift tax, it does impose inheritance taxes on large gifts. Whether your recipient pays taxes on that gift depends on factors that include:

  • Your nationality.
  • Your residency.
  • Whether the recipient is a charity or political party.
  • Your gift is more than $425,000.

The last point is related to the UK’s inheritance tax laws. Our research suggests that large money transfers may fall under these regulations. But given the complexity of tax laws, talk with a professional to learn whether taxes apply to your situation.

What are the penalties in the UK if my recipient fails to file?

Our research indicates that past due taxes may attract interest if the transfer falls under the UK’s inheritance laws. And those interest rates can fluctuate with the market.

To understand the specific penalties that apply if your recipient fails to file, talk with a tax professional.

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Do I have to report large remittances out of the US?

It’s likely that you’ll need to file a form with the IRS after transferring a large amount of money to the UK. Anyone who gifts more than $15,000, has a foreign account with a value of $10,000 or more or transacts business totaling more than $10,000 in a year may need to file remittances with the IRS.

Shaving a couple of dollars off your ten-grand transfer may not save it from being reported: Banks and transfer specialists are required to report transfers of $10,000 or more to the IRS, but they sometimes report remittances as low as $1,000.

How much money can I send to the UK?

While you won’t hit a legal limit when it comes to sending money to the UK, financial institutions and transfer services may cap how much you can send at a time.

Digital money specialists like the commission-free XE transfer allow transfers of any amount for select customers, no matter how large.

How can my recipient in the UK get the money?

The UK offers flexible money transfer options. Depending on the transfer company you use, you can set up your transfer for cash pickup, a bank deposit, a deposit to a mobile wallet or an international money order delivery.

Cash pickups may be limited outside of major cities. Read our guide on transferring money to the UK for details on sending and receiving funds.

Bottom line

The UK appears to have only one tax law that could affect your large money transfer — and it may not even apply. Learn more about rates, fees and turnaround to the UK in our comprehensive guide to money transfers.

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