6 tips for how to transfer inheritance to USA

Here’s how to transfer your inheritance to the USA:

1. Don’t use your bank. Banks may charge margins on the exchange rate of up to 5% in addition to hefty fees.
2. If the estate has not been formally settled yet, consider using a Forward Contract to lock in an exchange rate for up to 12 months, so your inheritance isn’t at the mercy of the foreign exchange markets.
3. Create an account with OFX to save up to 75% when moving your money overseas.* OFX charges no transaction fees on transactions over $10,000, and we use local banking networks to process your transfer, so you may get your money faster.

If you receive an inheritance from someone who was residing overseas, there are a few things you should know before transferring your inheritance to the USA from another country

What to expect when it comes to inheritance taxes

While every effort is made to ensure this content is up to date and accurate, this information provided by OFX does not take into account your specific financial objectives and requirements. Beneficiaries of an inheritance from abroad must seek specific advice from tax professionals in the local jurisdictions to ensure that all applicable taxes are paid in a timely manner. OFX does not provide tax or financial advice.
 
Inheritance taxes can be confusing because they vary from one country to the next. Also, many times, the executor will be responsible for paying the tax on the estate, so the beneficiary might not be required to pay any inheritance taxes after all (unless the beneficiary is also the executor). To learn more about the inheritance tax rules in the U.S., it is recommended that you consult with an experienced financial advisor, as there might also be federal or state level estate taxes that may apply to your inheritance.
 
In the United States, whether or not you will need to pay taxes on your inheritance from overseas may depend upon where the deceased lived prior to his or her death, if any tax treaties are in place, and how much you are inheriting. Read here for more information on moving your inheritance to the USA.

You may want to keep the following in mind as you work with your financial advisor to be sure you are properly declaring any assets that you are transferring to your name. Here are a few points to discuss:

1. If you inherit assets that are located in another country, whether those assets are in the form of real estate, investments, or bank accounts, the U.S. federal estate tax is likely to apply, provided that the individual who left their inheritance to you was a U.S. citizen or legal resident. Even if they resided outside of the United States, their estate will usually be considered subject to U.S. taxes.²
2. Your overseas inheritance may be subject to taxes applied by the foreign country, even if you transfer that money into your U.S. bank account. However, thanks to Double Taxation Treaties, if you receive and transfer an inheritance from overseas, you may be able to deduct any taxes that you were required to pay to the other country, if you can furnish proof that you have already paid elsewhere. To declare the amount of taxes that you paid to the foreign nation, you’ll most likely use Form 706-CE. 
3. If you receive an inheritance from overseas and the deceased had not been a citizen or legal resident of the United States, you may be exempt from the estate tax. This does not mean, however, that the estate will not have to pay taxes to the foreign country where the assets are held. In order to receive this exemption and avoid paying fines in the U.S., you may need to declare the inheritance transfer on Form 3520. This form is used to declare any transfer of property or gifts that are given by a foreign individual.  

Inheritance taxes are complicated and that’s doubly true if you’re inheriting from overseas. It’s well worth the small price of a professional consultant who can ensure you’re paying the right amounts to the right jurisdictions

For more detailed information on how to transfer inheritance to USA from another country, check out our Guide to Repatriating an Overseas Inheritance.

*Average savings based on published rates of ANZ, Westpac, NAB and CBA on a single transfer of AUD$10,000 to USD between 21.2.17 and 2.3.17. Transaction costs excluded. Quoted savings are not indicative of future savings  

IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.