Money transfer between US and non-US citizen spouse

[Helen123]

Hi

I have two quick questions. I am working in the US and my husband works in the UK. Therefore, I am considered as US tax payer and my husband as non-US citizenship. I know that I can transfer 164k per year to him without paying tax.

1. I assume if I do not transfer to him more than 164k per year, I do not need to report it to IRS, correct?

2. How much can he transfer to me? Is there any tax for him based on US tax law? If he transfers money to me, do I need to report it to IRS? I know that there is a law that if other people (except for my oversea account) transfer more than 100k to me, I need to report it to IRS. Does it limit to husband?

Thanks,

Helen

[tagteam]

I will page Champ @pk

[pk · Accepted solution]

@Helen123 ,  assuming that you are a US person ( Resident for Tax purposes ) based on your earlier posts, , you filing form 1040 and that your husband is a Non-Resident Alien ( citizen of UK and  having tax home in the UK ),  your sending  or receiving monies :

(a) if you transfer  monies  more than US$10,000,  your bank will raise an  SAR   ( Suspicious  Activity Report )  as a routine matter  and  then this will be dealt with -- nothing happens .  There is no permission required  or consequences  ifd the amolunt is less than a Million USD -- beyond that amount there is a permission  required.  I don't know  where you got this US$164K limit -- I have no recollection of a  limit  transfer between Husband and Wife or even between a US person and an NRA ( Non-Resident Alien )..   There is NO tax impact of sending monies  to any-one, let alone between husband and wife.

(b) If you are receiving monies from abroad, then the only requirement is for filing a form 3520 recognizing gifts  equal or above US$100,000  from a foreign person / entity.  Generally  this is not applicable  to transfers between husband and wife, but the rub here is  which  has primacy  ----- the Husband wife  transfer or US Person and  NRA.  I would personally argue that a Husband -Wife  has primacy  and therefore there is no requirement to file form  3520 when the transfer is between  Spouse , even if one  is a US person and the other is not. ( because the latter -- US person & NRA -- is assumed to be a transient situation.

(c) If you accept my contention   that this primarily a transfer between  Husband and Wife, then  there is no requirement for either party to submit form 709 and /or 4808.

In summary what I am saying is that there is NO reporting required  ( for Federal tax purposes ) when the transfers is between Husband and Wife , irrespective of amounts  and citizenship / Residency  stati.

Is there more I can do for you ?

pk

[Helen123]

Many thanks, that is super helpful. So, I assume it means we can transfer money whatever we want without any limit and there are no reporting and tax requirement, right ?

We tranfer money between each other is to support the life for each other. It says that If your spouse is not a U.S. citizen, tax-free gifts are limited to present interest gifts whose total value is below the annual exclusion amount, which is $164,000 (for 2022) and $175,000 (for 2023). So, I am not sure that supporting life money transfer belongs to the gift or not. That is why I gave myself 164k or 175k limit.

Thanks,

Helen

[pk]

@Helen123 , please note that the figure of US$164,000 is  associated with a decedent's gift 

" If the decedent's spouse is not a U. S. citizen, the annual exclusion for gifts made to the decedent’s spouse in 2022 is $164,000to a Non-Resident Alien Spouse "

 from Pub 559 ---   

Publication 559 (2022), Survivors, Executors, and Administrators | Internal Revenue Service (irs.gov...

I don't believe that is  applicable to your case   -- you is quite  alive and far from being a decedent ( hopefully   NOT  for a long, long , long, time 

[Helen123]

Ah, I see, haha. I am still very young. Many thanks

Helen

[Helen123]

Sorry for one extra stupid question. I assume no tax and report requirements for unlimit money transfer between spouses are not only limit to transfer between US bank accounts but also between UK and US bank accounts and between UK bank accounts, right? 

[pk]

@Helen123 , I agree  with the ;proviso that this is valid ONLY for US tax purposes.  Thus monies  transferred between a US bank account ( one spouse or jointly held )  and a foreign ( UK )   bank account   ( owned  by one or both spouses ) has no reporting accounts .  But note that aa US resident ( for tax purposes )  your foreign bank account comes under the FBAR and FATCA laws/ requirements.

Does this clarify  your situation?

pk

[Helen123]

So, at least for US tax purpose, there are no tax and report requirement for US bank accounts transfer, UK bank transfers and between US and UK bank account transfer, right?  I understand that I need to repot them to the Fbar after the calendar year before April 15th the next year.

One more question, if I use uber three times a month and then they give me 5 dollar credits, can I consider it as the reward not the income and therefore I do not need to report them for the tax, is it correct?

Helen

[pk]

@Helen123 , if, because you are a repeat user , and therefore they  reduced/ refunded an amount then because then  since the original expense was  not deductible  from your income, neither is the reduction/ refund an income.  Nothing to report or recognize.  This applies to all tax payers, not just aliens ( NRAs and Residents ).

Hope this makes sense 

pk

[Helen123]

many thanks. that is super helpful. For my first question, my understanding about bank account is also correct, right?

[Helen123]

@pk Just doube check. So, at least for US tax purpose, there are no tax and report requirement for US bank accounts transfer, UK bank transfers and transfer between US and UK bank account, right? 

[pk]

@Helen123 , your understanding about there being NIL reporting requirements on interbank / intra-bank transfers is correct  (as long as the amounts are less than treasury limits and the foreign bank is not in one of the sanctioned countries or is not a sanctioned bank ).  Since you are dealing with only US /UK banks  and neither you nor your spouse is a sanctioned  person,  just don't worry about transfers.

Hope this puts to bed all your worries on this subject. 

pk

[pk]

@Helen123 -- correct unless you are transferring more than US$10M  when you would need US treasury permission.

pk

[Helen123]

many thanks