International money transfers between family members

December 9, 2006 7:58 PM

What's the best way to transfer money from my father's (residing in Japan) account to my own in the US for banking/investing, and what complications may there be? Or, if he's not expecting extreme rates, are there better options he can pursue himself within Japan?

Bank rates in Japan has been sitting pretty darn close to 0% for a long while now. I flew back over there for the first time in several years for work, and people that I talked to were simply amazed at the rates some online banks offered (4~5%).

Due to some family reasons, I'm in the US now as a full US citizen, and my father's still working in Japan, citizen status Japan. There's probably at least 200~300k that my father wouldn't be spending right away that he's interested in investing. Would he be able to wire money to my account for me to invest over in the US, and if so, what sorts of taxes & other costs might be involved?

Changing the question around a bit, if my father's only looking for a 3~5% return, do money market funds or other similar entities exist in Japan that can offer such a rate?

posted by Muu to work & money (6 comments total)

I'm an American living in London and regularly send money back to Maw by wire transfer; have you asked your banker about this option? I don't see why it wouldn't be available between the US and Japan.

I think your concerns should focus not on how you're gonna get the money into your account, but rather explaining how you suddenly received $300K, and dealing with the aftereffects.

I haven't lived in the US in ten years, but I do know they've gotten sorta anal about large sums of money whizzing about. $300K dropping into your account will almost certainly raise questions. The doomsday scenario would be if someone, somewhere, decides these are ill gotten gains and seizes the assets.

Then there is the issue of minimising or (if possible) avoiding taxation. The annual US monetary limit on receiving gifts is $11K; anything over that is taxable. In other words, as I give Maw about $10K / year this is tax free, she'd be required to pay tax on any amounts above the annual $11K exemption.

With the size of the sums you're considering I'd suggest sitting down with an accountant who knows both the US and Japanese regulatory environments. I use KPMG myself and can reccomend them. They are indeed pricey but you get what you pay for.

The Accountant more than likely would be able to answer your questions regarding investment vehicles as well.
posted by Mutant at 11:56 PM on December 9, 2006

I would also consult with your bank/financial institution to find out what their policy is on allowing non-Americans who are also non-residents to get a bank account. If it is allowed, it would be far, far easier if he got his own bank account in the US and then wired his funds from his Japanese account to his US account. You can do so for pretty cheap (something like 5,000 yen flat fee, I believe), and you don't have to pay any gift tax on the transfer, as it's just from himself, to himself.
posted by Bugbread at 2:40 AM on December 10, 2006

I live in Japan and have a Japanese as well as US bank account. I use Lloyds bank remittance service, which is fairly awesome. If your dad is in Tokyo, he can go to Lloyds office in Akasaka and sign up for an account for free (sometimes they have a coupon for first transfer free as well). You can make the transfers from your dad's bank's atm machine, and it will clear the same day. Usually costs around 30$ (20 in Japan, 10$ or more in America).

There are also plenty of foreign financial advisors around that would be happy to invest his money for him.

Dunno about the tax implications, but I probably should find out.
posted by ejoey at 4:52 AM on December 10, 2006

Citibank Japan lets you open time deposits in foreign currencies that get into the 3.xx% range. So you'd deposit yen, have it shuttled into (say) a one-year US$ time deposit, and sit back.

They also have a handy service that allows you to call them up and order an international transfer to a registered account over the phone (Japan residents can do this via their website too...not sure why non-residents are excluded). I make use of this myself.

Other banks may do this too—I have no idea.
posted by adamrice at 7:45 AM on December 10, 2006

Thanks for the replies. Assessing the answers you folks've provided, it sounds like I'm probably going to be best off seeing what investing options can be offered without transferring assets. I'll probably direct research efforts in that way; considering that groups like Fidelity have international branches everywhere, I can't imagine that there isn't some sort of a low-risk bond available that we can take advantage of.
posted by Muu at 8:32 AM on December 10, 2006

Had the window open too long and missed your post, Adam... Something like this may work, as long as we watch fluctuations in Yen/$. From reading the site it seems like the international CDs get dumped into a standard savings acct in that same currency -- is it correct to assume this can be stored as a CD again without transferring it back to JPY first (thereby avoiding the 1Yen/$ processing fee)?
posted by Muu at 9:04 AM on December 10, 2006