Transferring Euros to pounds 60000E

thefold

Hi all,

Hopefully someone has been in this position before or has good knowledge regarding this transaction.

Basically, my partner and I are shortly looking at buying a house in England and will be using savings she has in Spain (where she is from) for the deposit. She has roughly 60,000 Euros, which is the cheapest and most secure way to transfer this money into pounds?

She has been to her bank in Spain this morning and they say she can open a euros account with Barclays who will then transfer this to pounds but she will have to pay tax on this because she is a UK resident. Is this the best way to go about things? I'm planning to visit my local barclays this afternoon to find out figures from this end but was hoping for some advice before this.

Thanks a lot.

nzseries1

I would suggest you read the "foreign currency" article on this very site (and associated forum discussion), which goes into excruciating detail (in particular, the "sending big amounts" section):
http://www.moneysavingexpert.com/banking/foreign-currency-exchange#step4

thefold

nzseries1 wrote: »

I would suggest you read the "foreign currency" article on this very site (and associated forum discussion), which goes into excruciating detail (in particular, the "sending big amounts" section):

Thanks, I did have a look at that but it seems to concentrate on sending money abroad rather than the other way round. I'm aware it will be a similar process but I was hoping there might be someone who has done this before and can possibly recommend a certain bank or exchance broker.

dazza.mk

thefold wrote: »

nzseries1 wrote: »

I would suggest you read the "foreign currency" article on this very site (and associated forum discussion), which goes into excruciating detail (in particular, the "sending big amounts" section):

Thanks, I did have a look at that but it seems to concentrate on sending money abroad rather than the other way round. I'm aware it will be a similar process but I was hoping there might be someone who has done this before and can possibly recommend a certain bank or exchance broker.

Some of the big brokers are mentioned in the article.

In terms of banks as long as the transfer is done using the UK account BIC & IBAN with selecting shared charges where appropriate then for transfers under 50,000 Euros the only charges should be 'potentially' from your Spanish bank, and then only the equivalent charge that they would make for a Euro transfer to another bank in Spain.

The UK bank shouldn't charge to receive the amount although some have found some loopholes:
First Direct specifically says :

(Payments up to EUR 50,000 or 500,000 Swedish Krona from a country in
the EU will be received free of charge provided the BIC and IBAN numbers

are provided with the payment.)


http://www2.firstdirect.com/content_static/pdf/rates_charges.pdf

presume the same is of HSBC but haven't checked their charges info.

Note if the transfer is made to the UK Sort Code and Account number (as opposed to BIC & IBAN) normal charges apply, only the BIC & IBAN are covered by EU legislation.

NFH

thefold wrote: »

She has been to her bank in Spain this morning and they say she can open a euros account with Barclays who will then transfer this to pounds but she will have to pay tax on this because she is a UK resident.

She would pay tax on the interest paid by Barclays on the new account - not something worth worrying about.

She can transfer the money to a UK GBP account in your name or her name using a broker like Halo Financial. I've used them several times, and working in wholesale FX myself, I'm fussier than most about getting a good retail FX rate.

markbodega

Spanish banks generally charge a percentage of transactional value, rather than a flat TT fee for moving money. This can make them better value on smaller transactions than UK banks, but way more expensive on large sums such as the sale of a property.

These transfer fees can be around 0.5% (sometimes even more) regardless of whether you're transferring the money to a bank in the UK or a currency specialist.

One point to note: quite often if the bank thinks it's a one off transaction or you'll be closing the account after the transfer they may well look to make more money from the transaction. If however they think they'll be more transfers to follow they may well look to keep your custom. Accept the fact you will need to pay something, but try to get the fee down to 0.1% - 0.2%.

The bank will also look to make money on the exchange rate offered if you decide to use them and more often than not will only give you the tourist rate on your transfers.

Another option you might want to consider is as follows. If you have a cheque book on your Spanish account you could bank the cheque with a UK currency specialist or UK bank. It will take around 6 weeks to clear, but you should avoid all charges (check the Spanish bank doesn’t charge for cheque clearly) and the money you save will be much more than any interest lost. You will get the exchange rate on the day the money clears and again, a currency specialist will normally give a better rate than the bank.

At the very least I'd therefore suggest you shop around. Call your wife's bank in Spain and yours the UK, investigate the options i.e setting up a Euro account and compare the exchange rates offered with those of a currency specialist such as HiFX. Make sure you ask all of them about bank charges as these can mount up. Also when doing the rate comparison make sure you do them one after the other as exchange rates can move quickly. As a general rule of thumb using a currency company will save you around 4% on the amount transferred so it's well worth the additional phone calls. 4% doesn't sound a lot but on €50,000 it's around €2,000 which will compensate for any changes from you Spanish bank!

When choosing a currency specialist, make sure they're authorised and regulated by the FSA for additional peace of mind. You can do this by going to the FSA's website. Also check that the company operates segregated client accounts. Personally if it were me making the transfer, I'd choose one of the larger co's for additional security.

Hope this helps.

Best regards

Mark

NFH

markbodega wrote: »

These transfer fees can be around 0.5% (sometimes even more) regardless of whether you're transferring the money to a bank in the UK or a currency specialist.

One point to note: quite often if the bank thinks it's a one off transaction or you'll be closing the account after the transfer they may well look to make more money from the transaction. If however they think they'll be more transfers to follow they may well look to keep your custom. Accept the fact you will need to pay something, but try to get the fee down to 0.1% - 0.2%.

Mark makes a very good point, and something I didn't know about Spanish banks. However, all banks in the Eurozone (including Spanish banks) are obliged by the EU's Payment Services Directive to charge the same for a cross-border payment within the Eurozone as they charge for a domestic transfer within the same country, which usually means it's free. In practice, many Eurozone banks apply this to cross-border transfers to other EEA countries (but not usually with card payments). If the Spanish bank concerned would make a charge, then find an FX broker with a EUR account anywhere in the Eurozone.

dazza.mk

markbodega wrote: »

S
Another option you might want to consider is as follows. If you have a cheque book on your Spanish account you could bank the cheque with a UK currency specialist or UK bank. It will take around 6 weeks to clear, but you should avoid all charges (check the Spanish bank doesn’t charge for cheque clearly)

Using First Direct as the example I quoted if you banked a foreign cheque their charges alone would be 0.5% (min £10 max £50), and there may be additional charges from other intermediariesm it definitely won't avoid all charges.

borderfox_2

transferwise.com

Good rates and easy to use service.

martamarcus

Thefold, did you find a solution to this?

My wife and I are in a very similar situation and very confuused about all the possible best advice.

My wife is from Spain and has about 18k euros we'd like to transfer to the UK. We don't necessarily need it all at once but we're keen to get the best rate.

She is not a Uk resident yet so I wonder if in our case it might make most sense to transfer to a GBP account in Spain first and then move the money?

I have Barclays and HSBC accounts at my end and she has LaCaixa and Santander accounts at her end, if it makes any difference?

Thanks! ...

Quote:
Originally Posted by thefold
She has been to her bank in Spain this morning and they say she can open a euros account with Barclays who will then transfer this to pounds but she will have to pay tax on this because she is a UK resident.
She would pay tax on the interest paid by Barclays on the new account - not something worth worrying about.

She can transfer the money to a UK GBP account in your name or her name using a broker like Halo Financial. I've used them several times, and working in wholesale FX myself, I'm fussier than most about getting a good retail FX rate.

NFH wrote: »

Mark makes a very good point, and something I didn't know about Spanish banks. However, all banks in the Eurozone (including Spanish banks) are obliged by the EU's Payment Services Directive to charge the same for a cross-border payment within the Eurozone as they charge for a domestic transfer within the same country, which usually means it's free. In practice, many Eurozone banks apply this to cross-border transfers to other EEA countries (but not usually with card payments). If the Spanish bank concerned would make a charge, then find an FX broker with a EUR account anywhere in the Eurozone.

dazza.mk

martamarcus wrote: »

Thefold, did you find a solution to this?

My wife and I are in a very similar situation and very confuused about all the possible best advice.

My wife is from Spain and has about 18k euros we'd like to transfer to the UK. We don't necessarily need it all at once but we're keen to get the best rate.

She is not a Uk resident yet so I wonder if in our case it might make most sense to transfer to a GBP account in Spain first and then move the money?

I have Barclays and HSBC accounts at my end and she has LaCaixa and Santander accounts at her end, if it makes any difference?

Thanks! ...


Noooo don't transfer to GBP in Spain, banks can charge what they like then, send the transfer over in Euros and the Spanish bank can only charge as much as it would for a naional transfer in Spain.

Check out what HSBC fees are, I stated above that First Direct would be free for that value, but I'm not sure about the rest of HSBC