Introduction
There are many reasons why an expat may want to use money transfer services in the United States. This includes:
- Receiving a salary
- Paying for a wedding
- Sending money back home to family
- Receive business money
- Sending money as a gift
Understanding how international money transfers work is essential to save money on fees and reduce transfer time. Also, figuring out the tax implications of transfers can help avoid legal problems. This informative guide helps British expats in the US to send money using the best practices.
How To Choose a Transfer Service for Sending Money to the USA
Start by figuring out what money transfer service you will use to send money between the UK and the United States. This section includes a list of factors you should consider when selecting the right specialist transfer provider.
- Accepted countries: start by ensuring that the service you choose allows for transfers from the UK to the United States. Most top-tier transfer providers have these countries in their worldwide coverage, so finding one should not be a problem.
- Cost: competitive money transfer companies will offer a fair fee structure for transactions. However, you need to choose a fee structure that matches your transfer size. For example, percentage-based fees are better for small transactions, and fixed fees are a good choice when transferring large amounts of money.
- FX rates: to get the best rates when converting GBP to USD, find a service that matches the mid-market rate. Options include Wise, Xe, and Instarem. They also have a far-reaching worldwide coverage that allows transfers between the UK and the United States.
- Transfer time: to enjoy instant processing times, find a service that offers balance transfers. To send money with a balance transfer, you need to top up the balance beforehand, and the recipient must have an account with the same company.
- Transfer cap: check the transfer caps for sending funds between the UK and US. Ideally, the service should accommodate the transfer size that matches your requirements. Inspect the daily, weekly, monthly, and yearly caps to understand the limitations better.
- Mobile app: using mobile apps to send money is convenient. The best transfer providers offer apps that have the functionality to send money internationally. Check if an app is available by browsing the App Store or Google Play.
- Reputation: do background checks to learn about the reputation of a service before using them. You can discover if they are prone to scams or have questionable customer service practices. Review portals like TrustPilot and social media websites since they are informative.
Tax Implications of Sending Money to the US
The taxes you need to pay for transferring funds to the US depend on the reason and the amount sent. Gift transfers are not taxable if the recipient has not received more than $15,000 in a calendar year. Also, the sender needs to pay taxes and not the recipient.
International money transfers in the United States of $10,000 and above need to be shared with the Inland Revenue Service. Many banks and money transfer services have systems that automatically share these transactions.
Transfers to the US that represent capital gains, income, business profit, and pensions are taxable. Consider hiring a tax accountant to ensure the correct taxes are paid with the Inland Revenue Service. Also, make sure to keep a detailed account of transactions to simplify the process of filing taxes. Services like Wise allow customers to access a detailed history of their transactions.
How To Get the Best GBP to USD Exchange Rates
Money transfers between the UK and US are likely to involve currency conversions between GBP and USD. To get the best conversion rates, you need to find a service that matches the mid-market rate. This means you will enjoy the best rates found anywhere at a given point in time.
However, the rates change daily, and keeping an eye on the trends allows you to determine the best time to convert currencies. In addition, micro-changes to the exchange rate will not affect small transfers but can significantly impact bigger ones.
Some money transfer companies allow you to set up alerts to inform you when a currency exchange represents good value. This is important for transferring business funds, and it is a service offered by TorFX. They are a superb choice for business customers with features like mass payments, business funding, and business health checks.
Top 3 Money Transfer Services for Sending Money to the United States
We understand that narrowing down a list of high-quality money transfer companies can be tricky. Therefore, this section offers a selection of the top 3 options that you can use to send money between the United States and the UK.
1. Wise
Enjoy the services of an industry-leading money transfer service by selecting Wise. It takes pride in offering transparent fees that keep you informed of the costs at every step. This approach is handy for comparing different money transfer methods, of which they offer plenty.
Wise also matches the mid-market rate and offers balance transfers. This is ideal for enjoying instant processing times. Finally, the service is regulated by the Financial Conduct Authority, which means that it is a safe company for storing and sending money.
2. Xe
Xe offers over 170 countries in their global network, including money transfers between the UK and US. Also, there is a reliable and intuitive mobile app that you can use for transferring funds and managing the account.
Transparent and competitive FX rates are one of the highlights of Xe. As a result, you can count on good value currency conversions between GBP and USD.
3. VertoFx
This money transfer service also offers competitive FX rates, which is ideal for converting between USD and GBP. VertoFX is aimed at business customers, and they offer several advantages. This includes international mass payments for businesses and a dedicated manager to help manage your account.
Summary
In conclusion, there is a lot to consider when sending money between the UK and US. First, you need to pick a top-tier money transfer company by considering factors like reputation, mobile app, fees, FX rates, transfer speed, and transfer caps. To save time, consider choosing one of the specialist transfer providers from the list above.
We encourage you to learn more about international money transfer by reading our guides on Sending money to the United States and the UK. They will teach you about the process of sending and receiving funds using different methods.
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April is a trained journalist and the Content Editor for MoneyTransfers.com. She has 10 years experience writing about a diverse range of subjects, from financial services to arts and entertainment. When she’s not writing about global remittances she can be found daydreaming about her next holiday abroad.