Multiple factors affect whether or not you need to
pay tax on money transferred from overseas.
- The source of the funds: Working abroad, inheritance, gift, proceeds from the sales
of a home, etc. - The nature of the tax laws of both countries involved (where the funds originate
from and where they are being sent). - The amount of money you are transferring.
- Your residency status in the country you are currently living.
What are the Tax Implications of Sending Money Overseas?
Generally speaking, if you are transferring your own existing money to yourself, you will probably not be required to pay additional taxes on the money. For example, if you are an American who has moved to the UK, and you want to move your savings account to United Kingdom, you will usually not be obliged to pay additional tax.
Transferring existing funds or assets to your spouse is also not usually taxed in most countries. Once you become a legal resident of a new country, income you earn from overseas will often be taxed, and that income can include capital gains, pension payments, and employment income.
Transferring Large Sums of Money Abroad
If you’ve received a large inheritance or have sold a property overseas and wish to transfer the money, various taxes may apply such as inheritance tax, gift tax, or capital gains tax. However, once those taxes are paid in the local jurisdiction where the assets originate, and the funds are yours, you may not have to pay tax again to repatriate the funds overseas.
Many, but not all, countries have double-taxation treaties in place, which protect citizens from paying tax on the money twice. However, you may be required to furnish proof that you paid any estate or gift tax to a foreign government. While you may not need to pay tax on large sums of money being sent abroad, some governments will require you to file a declaration that you are bringing the money into the country.
Failing to declare the assets could result in a fine.
