Should I hold sterling in UK for brother in Oz?

TheOldDear

As our mother's executor I will soon have a 6-figure sum in GBP to pay to my brother in Australia, but he tells me that the current exchange rate means it's a bad time to transfer money in that direction. Any ideas on the advantages or pitfalls of my holding the money here in the UK for him until a better time? And if I do, any suggestions for best interest-bearing account? I have a dormant cahoot savings account I was thinking of using, but am not sure what's happening with them now that they're owned by Santander. Many thanks!

xylophone

I think that it would be very unwise to pay money properly owing to your brother into an account in your name - this would make the money legally yours and the interest would be taxed at your highest marginal rate?

Perhaps your brother should consider opening a sterling account with an Australian bank so that he can watch the exchange rate and transact when he chooses?

Voyager2002

For a start, you must not put the money in an account in your name.

Your responsibilities end when you tell him how much is due to him and ask him what he would like you to do with the money. If he were to come here and ask for advice, I would ask him whether he still had any sterling bank accounts (or US dollar for that matter) and if not, suggest that he find out whether he could open such an account in Australia.

TheOldDear

Thanks, you two, for the feedback. My bro has lived in Oz for 40-odd years and is an Australian citizen. He's looking into opening a sterling account there but apparently it wouldn't attract any interest. Maybe I'll just agree to hold on to his money for a short time until he's researched what best to do. As for tax, I don't usually pay any to speak of, but of course I've inherited some money too so I guess that will change now. Just hoping the inheritance itself isn't taxable!

xylophone

I am assuming that you have opened an executor's account - you could hold the money there pro tem?

http://www.hmrc.gov.uk/inheritancetax/intro/basics.htm

Biggles

I doubt he has any valid reason to expect the exchange rate to pick up in the near term. You should really send him this money pronto, it will only be losing value while it's in limbo anyway.

What if you were taken ill or had a accident? The longer it went on, the more imponderables there would be. You need to get rid.

xylophone

valid reason to expect the exchange rate to pick up in the near term.

I have to say that we have needed to remit money to Oz on a number of occasions and it really is a case of "you win some you lose some" ( rather like my investments....):eek:

TheOldDear

Yes, there's an executor's account, which does pay interest, but I was thinking of moving bro's money to a different account so that it's obvious what interest is his and what isn't. No inheritance tax due, by the way, as the threshold was much higher than the sale proceeds of their house when both parents' allowances were combined.

Biggles

But the interest would all be in your name (as would the tax deducted from it for that matter).

It's a Very Bad Idea unless there's any way he can open his own GBP account. He wouldn't be very happy if it suddenly became part of your estate; more unlikely things have happened.

And xylophone is quite right, it's swings and roundabouts - he'll thank you if the exchange rate keeps going the wrong way for years.

Mojisola

TheOldDear wrote: »

As our mother's executor I will soon have a 6-figure sum in GBP to pay to my brother in Australia

I have a dormant cahoot savings account I was thinking of using, but am not sure what's happening with them now that they're owned by Santander. Many thanks!

As executor, you have a legal duty to sort out the estate.

Putting someone else's inheritance into an account in your name is not a wise move!

le_loup

Mojisola wrote: »

As executor, you have a legal duty to sort out the estate.

Putting someone else's inheritance into an account in your name is not a wise move!

Not just unwise; downright daft!