Tax guidelines and regulations for large money transfers into the UK

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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OFX				24 hours	$0	Go to site View details	OFX has no maximum limit transfers, with competitive exchange rates for 45+ currencies.		loading Fetching your data...
Dunbridge Financial				24 hours	$0	Go to site View details	Dunbridge Financial offers competitive exchange rates and zero fees on transfers to more than 120 countries.		loading Fetching your data...
CurrencyTransfer				24 hours	$0	SPECIAL OFFER ✓ Minimum transfer of $1,000 for Finder readers (normally £5,000) Go to site View details	Exclusive: Minimum transfer of $1,000 for Finder readers (normally $5,000). CurrencyTransfer lets you shop around for the best exchange rate on its online marketplace.		loading Fetching your data...
XE				Within minutes	$3	Go to site View details	XE has fast transfers with low fees and a range of foreign currency tools.		loading Fetching your data...
Wise (TransferWise)				Within an hour	From $2.26	Go to site View details	Wise uses the mid-market rate and transparent fees to help you send money in 45+ currencies.		loading Fetching your data...
OFX International Money Transfers (Business)				24 hours	$0	Go to site View details	Business customers: Send safe, no-limit transfers with no fees and competitive exchange rates.		loading Fetching your data...
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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 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.

Frequently asked questions

• What is the UK inheritance tax rate?

  The inheritance tax applies at different rates that depend on the time of the gift and the gifter’s death.

  The rates below are current as of February 2019.

  Years gift given before death	Inheritance tax owed
  Less than 3 years	40%
  3–4 years	32%
  4–5 years	24%
  5–6 years	16%
  6–7 years	8%
  7+ years	0%

• How is the UK inheritance tax paid?

  You can pay an inheritance tax in the UK:

  • Online or by telephone
  • CHAPS or Bac
  • At a bank or building society
  • By check through the mail

  If you’re granted confirmation, representation or probate, you can also pay through:

  • Accounts belonging to the deceased.
  • National Savings and Investments and government stock the deceased own

• Will failing to file a gift tax return in the US result in penalties?

  Likely, yes. You can avoid penalties in select cases — for example, if there’s a reasonable cause behind your failure to file. Talk to a tax professional to learn whether your situation qualifies for an exception.