# UK citizen living abroad: Finances



## vaz1 (Jul 13, 2012)

Hi 

I am a UK citizen currently living in Myanmar (Burma) and about to move to Shanghai, China. My wife is a US citizen.

I was wondering if anyone had any tips for me to make sure my finances/taxes/investments are OK as I am new to this. I don't plan to live or work in the UK in the future except for visiting family.


I have a HSBC (UK) current account as well as an ISA with them with approx. £5000 of savings.

I have two UK credit cards with no debt

I have 6 years of pension contributions.

I have student loans, but no other debts

I do not own any property.

So do I qualify as a non-resident as I haven't lived in the UK for two years? What does that mean and are there any advantages/disadvantages to it? Do I notify my bank I am a non-resident?

My current job pays in USD cash. I have $60,000 USD in cash savings in Myanmar. I pay tax in Myanmar. Can I bring that money to the UK and deposit it in a UK account? I know I can only bring in 10,000 EURO into the UK as nothing to declare. Can I bring in more if I can show I have earned the money and paid tax on it in Myanmar?

Should I pay voluntary contributions for NI? Does this mean I will get a state pension if I have enough qualifying years (30 years, right?). My mum says this is a good idea and keeps telling me pay into it.

Thanks in advance!


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## Bevdeforges (Nov 16, 2007)

I've moved you over to the Expat Tax section. Although your query isn't strictly about taxes, there are lots of tax angles to what you're asking about - and chances are, someone here in the tax section will be able to provide a bit more information.

First of all, I noticed you said your wife is a US citizen. I assume she is aware that she is supposed to be filing US taxes (forever) if her income exceeds the filing threshold for her filing status. (And the fact that she will probably be filing "married, filing separately" means she is subject to the lowest threshold - about $4000.) Anyhow, just a note.

On your side of things, I believe that you have to apply to the UK tax service to be declared "non-resident" for taxes. But I'm hoping someone will come along with a bit more information on that. Ditto on the ability to pay "voluntary" NI contributions.

It's likely that HSBC will let you keep your current account. (Well, they let me keep mine long after I left the UK.) They threatened at one point to close my savings account with them - but I got tired of waiting for them to do so and closed out both accounts myself. (I think that may have been the plan all along.) It's really only a matter of bank policy whether you can maintain an account as a non-resident - though you may find that opening new accounts in a new bank may become difficult, thanks to the "know your customer" regulations.

As far as moving your cash savings to the UK, it would be much better if you could make a bank transfer. Carrying large amounts of cash between countries always raises sticky questions. And it's more or less universal now that moving anything over $10,000 into or out of a country requires paperwork showing the source of the funds and their intended use. If you go through a bank, they'll handle the paperwork on both ends of the transaction (for a fee, of course).
Cheers,
Bev


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## vaz1 (Jul 13, 2012)

Hi Bev thanks for reply and moving the post to the correct forum

My American wife knows she needs to file her taxes, but she has never done so. If she starts this year, will she have any penalties for years of missed tax returns?

I am pretty sure she doesn't owe any taxes as she spends less than 35 days per year in the US and she is resident in Myanmar and soon to be in China and earns much less than $100,00USD

I found this on the IRS website:
If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). 

I know it is safer to do a bank transfer, but in Myanmar it is not easy to this. Not many countries have banking agreements with Myanmar. I'm not sure what I should do...


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## Bevdeforges (Nov 16, 2007)

As far as your wife's situation is concerned - if she wants to "get right" with the US tax people, she should probably look into the Streamlined Compliance program https://www.irs.gov/individuals/international-taxpayers/streamlined-filing-compliance-procedures but quite honestly, she can continue to fly under the radar as she is doing, as long as she has no (or very few) financial resources back in the US. Any penalties for filing "late" are a percentage of the tax due - so if she owes nothing, then even 100% of 0 is $0.

But, there are still lots of folks resident overseas who simply don't file and unless something happens to make the IRS aware of their presence AND potential back tax jackpot of some sort, nothing ever happens.

Yeah, I suspected that the banking system in Myanmar might not be terribly well developed. You may need to find out what the limits are for bringing money in and out of the UK. But I suspect the Shanghai banking system may be far more adapted to money transfers. 
Cheers,
Bev


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## Moulard (Feb 3, 2017)

vaz1 said:


> I am pretty sure she doesn't owe any taxes as she spends less than 35 days per year in the US and she is resident in Myanmar and soon to be in China and earns much less than $100,00USD(


Your wife needs to be aware that she needs to file based on her global income. Not just income from within the United States. 

The filing requirements are the same regardless of whether you are in the US, outside the US, and/or earn US or foreign income.




> If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015).


Those amounts reference to the Foreign Earned Income Exclusion. If you reside or are physically present in a foreign country you can exclude the first ~100,000 of your foreign income, so that it it is not taxed. 

She still has to report the income and file tax returns if she meets the filing thresholds. 

She can use this IRS interview tool to help determine if she has to file.

https://www.irs.gov/uac/do-i-need-to-file-a-tax-return


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## vaz1 (Jul 13, 2012)

Hi thanks. Yeah apart from her job in Myanmar which is much less than $100,000 USD she doesn't have any other assets, income or investments. She has approx $500 in a savings account and a life insurance policy that her parents started. 

All future investments will be done in my name only as US tax laws complicate international investments...


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## Moulard (Feb 3, 2017)

On your questions related to penalties...

If her wages are below the foreign earned income exclusion and all her passive income is below about 10,000 USD then there should be zero tax due and thus zero penalties.

From what you have said, it sounds like your wife will be comfortably below FBAR filing threshold of $10,000. Although that may still be required if she is a signatory or joint account holder on your assets. Chances of penalties related to that are extremely remote.


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## vaz1 (Jul 13, 2012)

So passive income is income from investments?

Yeah we will put any future investments in my name only, so she won't have passive income. And as school teachers, I'm not sure our foreign income will ever reach that high... 

She may continue not filing her taxes, as she will be below both FBAR and foreign income thresholds. Not to avoid paying tax, but probably out of sheer laziness and the unnecessary need to.


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## LesFroggitts (Dec 30, 2013)

vaz1 said:


> I know it is safer to do a bank transfer, but in Myanmar it is not easy to this. Not many countries have banking agreements with Myanmar. I'm not sure what I should do...


One thing to bear in mind here, if not doing the transfer through a bank, but using someone like Western Union or others is to remember that larger amounts automatically trigger compliance checks (we just got caught for that and it was a PITA) in which you have to prove and justify the funds were and are yours. Might sound simple enough but it's not always so easy.

Check for the threshold in the UK if transferring there - we did a transfer of just over EUR 10k from the sale of a car when I was leaving the last country and had already closed our bank account - hence the use of a transfer agent and that amount triggered the additional checks - took us about two months to get the money released to our account.


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## Moulard (Feb 3, 2017)

Also bear in mind that it is not just larger amounts that trigger these sorts of checks.

Repetitive transfers of sizable amounts that are less that the automatic reporting threshold can also draw scrutiny.


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## vaz1 (Jul 13, 2012)

I was considering Western Union as they have recently allowed outbound payments from Myanmar, however I can only transfer $3000 USD at a time, and i have to convert my USD into local currency first and then back to USD, which makes no sense to me, but I guess its how they make their money... So I'd rather not go through all of that. And as you said it may still trigger fraud detection...

I really don't want to carry $60,000-70,000 dollars into the UK. But what other options do I have?


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## Moulard (Feb 3, 2017)

Most banks can do international transfers. You shouldn't have to go through a third party (like Western Union).
I would suggest speaking to your local bank first.

You can also forewarned the banks on both sides in advance of the transfer. Yes, they may have to to report the transactions but it is less likely to appear as suspicious if you are up front about it. But then again, when I did it, I could walk into and speak to the branch manager on the receiving end.


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## nikkisizer (Aug 20, 2011)

vaz1 said:


> I am a UK citizen currently living in Myanmar (Burma) and about to move to Shanghai, China.
> 
> I don't plan to live or work in the UK in the future except for visiting family.
> 
> ...


Hi vaz1,

Please refer to my answers above and also check out this website which you may find of use:

https://www.gov.uk/voluntary-national-insurance-contributions


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