Gift sum of Euros

Irish_Gal

I have been given a gift of 80,000 euros from my father who lives in Ireland - but I am based in the UK, I have a few questions to ask the forum:

1. Will I incur any inheritance tax, even though this is from my father who is not deceased?
2. Would you recommend that I open an international banking account so that I can use these funds here or in Europe?
3. If I exchanged these Euros into Sterling, would it be prudent to open an international account to receive a better exchange rate?

I look forward to hearing back from anyone that has any information that could help.

kidmugsy

Irish_Gal wrote: »

]Will I incur any inheritance tax, even though this is from my father who is not deceased?

No inheritance tax for you in the UK: in spite of its name, it's not a tax on the inheritance received by somebody, but a tax on the "estate" of somebody who dies. Nor do we have a gift tax.

Your position under Irish tax law may be different, but you're in the clear under ours.

As for the gift: what form does it take? A cheque?

Irish_Gal

HI there, thank you so much for replying. I assume it will be transferred into my account when I open it via the bank. At this stage I am not sure, other than the bank manager in Ireland was very helpful and asked me to let him know when I am ready to transfer the funds.

xylophone

http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html

You may wish to advise your own bank that you are expecting the gift.

Voyager2002

I would not advise transferring this sum to a UK bank: there would be a transfer fee, and you would probably lose on the exchange rate applied.

Personally, I think I would open a Money Fund investment with Fidelity; the funds in Euro would then be paid in to the account, and I could either invest them in Euro or exchange at a good rate to pounds sterling or whatever other currency and then transfer to a bank in the appropriate country.

Unless you need to spend the money now, you might like to bear in mind that the pound sterling is at an unusually high level (so the amount in pounds that you would receive for Euro 80,000 is unusually low). Unless you believe that this exchange rate will be sustained indefinitely, you might choose to invest some of your money in Euro, dollars or whatever rather than converting the lot to sterling at today's rates.

Irish_Gal

Hi there Voyager, thank you for the heads up. this is the information I am looking for. You use the term 'I' - is this something that you do for a living? By opening a money fund investment does that mean that it will limit the flexibility of how I use the money? i.e. my intention in the long term is to use the money when I sell my property and buy another without a mortgage.

Voyager2002

Irish_Gal wrote: »

Hi there Voyager, thank you for the heads up. this is the information I am looking for. You use the term 'I' - is this something that you do for a living? By opening a money fund investment does that mean that it will limit the flexibility of how I use the money? i.e. my intention in the long term is to use the money when I sell my property and buy another without a mortgage.

No, I don't do this for a living but have lived in other countries and so have needed to investigate ways of moving money around the world.

I think that the answer to your question is 'no', but it is more than ten years since I last used Fidelity (although I spoke with them recently about a similar issue). I understand that you are looking at a matter of days for anything to happen, but I suggest you check with them. They have a freephone number in the UK, and for an amount of that size they would be happy for you to speak with their Wealth Management specialists. Obviously they offer a wide range of investments, and many of these are only suitable for a period of years.

Irish_Gal

Thank you Voyager, I shall follow this up on Monday.


Kindest regards.

bowlhead99

On a similar thread a couple of days ago (large amount of Euros being received in the UK) I suggested simply opening up a Euro bank account to receive the funds and use an FX broker to exchange to sterling at the best rate you can find at the time you want.

https://forums.moneysavingexpert.com/discussion/5026889

I mentioned Citibank in my post as their accounts are quite useful, you can have one debit card set up across GBP, EUR and USD current accounts and then via their online banking you can change which one of them is the default account that it debits from. This is useful if you are going to be in Ireland or other parts of Europe spending money from time to time.

Voyager2002 wrote: »

Unless you need to spend the money now, you might like to bear in mind that the pound sterling is at an unusually high level (so the amount in pounds that you would receive for Euro 80,000 is unusually low). Unless you believe that this exchange rate will be sustained indefinitely, you might choose to invest some of your money in Euro, dollars or whatever rather than converting the lot to sterling at today's rates.

I mentioned on my other post that if you receive it into somewhere it can be held as Euro for a while, there's no urgency to convert it just yet. However, if the currency you live your life in is GBP, it does not make sense to hold a massive amount of EUR (more than a year's net salary for most people) in a foreign currency where its value in sterling terms can move around by five or ten percent in a matter of a few months. To do so is pure speculation.

The fact that the Euro buys you less sterling now than it did this time last year is true, but it doesn't mean the Euro is 'unusually' low. We have no idea what will be the 'new normal' rate of the Euro over the next 10 years. It has been as strong as being able to buy a pound for only 1.1 Euros, at the very bottom of the market crash in 2009, but I can remember a driving holiday in France where I used my speedo to convert currencies because each pound was worth 1.6 Euros just like a mile was 1.6 km.

So, if you don't actually need a huge amount of Euros to live your life, converting most of them to GBP quite swiftly would make sense, and then just don't worry about 'what might have been'.

By all means, if you don't need the money to live your life and are going to invest it for the longer term in an investment or retirement portfolio, make sure you invest in European and US and Asian investments as well as UK ones. It is good to hedge your bets, in that sense.

But holding pure foreign currency cash without making enough interest on it to cover UK inflation and all the potential exchange rate losses you would have if the rate worsened and you needed to get the money back for a UK expense like house, car, a child's education etc, sounds quite risky to me.

Baloos_EUR_account

I have a very similar problem with a twist. I have 24.000 EUR cash in my hands as a gift from my father, and I'd like to use it for my deposit for a house in the UK.

I'm originally from a country where banks are less trusty and more expensive, and any money moves done by cash instead of electronically. Therefore less transparent, less convenient but way more reliable.

I get turned down from the High Street banks. This country prevents their people from getting involved in international banking that's incredible. Most of the High Street banks simply don't do other currencies, some of them want incredible high annual income figures AND more one-off deposit in the EUR account what I have all together AND want all my banking with them.


Can any of You help me go step by step what could be the best - and cheapest - course of action for me from EUR cash to GBP on my current account?

colsten

I am not surprised that no bank wants to take €24K in cash from you. It will even be difficult to deposit 24K cash in stirling without proof of origin.

You could try an offshore bank, they are geared up specifically for international banking. I doubt however that they will take your sum in cash. You really need to transfer it electronically. I can't think of any Euro country that has banks that can't make an electronic transfer. I can, however, think of at least one Euro country which has restrictions on the export of money.

Baloos_EUR_account wrote: »

This country prevents their people from getting involved in international banking that's incredible.

I don't think there is any evidence for this. If anything, the UK has the most international banks of any country in the world.

Baloos_EUR_account wrote: »

Most of the High Street banks simply don't do other currencies

That is also not true. They all have foreign exchange facilities. Try exchanging your cash to UK Stirling in your home country, or in another Euro country. You'll however still have trouble if you rock up in a UK bank with wads of cash.