A significant shift in U.S. financial policy is on the horizon — and it could affect many globally mobile individuals and the advisers who support them.
On May 22, the U.S. House narrowly passed the “One Big Beautiful Bill Act” (215-214), which includes a proposed 3.5% excise tax on international fund transfers made by non-U.S. citizens. With a Republican majority in the Senate, the bill is expected to pass — potentially as early as July 4, 2025. If it does, the new tax will come into effect on January 1, 2026.
Here’s what you need to know.
Who’s Affected
The tax targets non-U.S. citizens, such as green card or visa holders (e.g., Australians on E-3 visas), transferring U.S.-earned funds abroad, including savings, salary, restricted stock units (RSUs), or proceeds from property or share sales. For example, a $1 million transfer would incur a $35,000 tax. Self-to-self transfers (e.g., moving funds from a U.S. account to your own overseas account) are likely taxable, as no exemption exists in the current proposal.
Example: I’m working with a client holding a US$10M+ stock portfolio. If they liquidate and transfer these funds to Australia post-2026, they could face over $350,000 in tax, significantly impacting their financial strategy.
Who’s Not Affected
Australian residents paid for services performed outside the U.S. (e.g., remote work for U.S. corporations), as these payments aren’t outward remittances.
U.S. citizens are not subject to the tax, and there are potential credits available for those who use government-approved transfer channels. Details are still emerging, so watch this space closely.
Compliance and Operational Impacts
The bill also outlines tighter compliance standards for remittance providers. Transfers over $5,000/day will trigger stricter KYC and reporting requirements. For less prepared money remitters, this could cause delays and customer frustration. Financial institutions and advisers should begin reviewing internal processes now.
What Advisers Should Do
- Plan for Added Costs: From January 1, 2026, outbound transfers could become significantly more expensive. Factor this into your planning for clients looking to move money out of the U.S.
- Monitor the Senate Vote: The bill could pass as early as Independence Day. That said, any amendments would trigger a return to the House and could push final approval into August.
- Review Client Exposure: Look closely at clients with equity compensation, offshore property, or large-scale savings movements planned in the next 12–18 months. Early preparation could save them a hefty penalty.
At OFX, we’ll be tracking developments and working with advisers to help clients navigate this complex regulatory environment. If you’d like to discuss how the proposed tax could affect your international transfers or clients, get in touch with our team.
