Don’t lose money from an overseas inheritance
Using an international money transfer expert could save you £££s
According to UN analysis of international census reports, more than 5 million Brits live abroad and as long as this trend continues, it is likely that, at some point, you may be in receipt of an inheritance which originates in another country.
When receiving this gift from overseas, the emotional challenges are compounded by the practical requirements of repatriating the funds; this may require transferring money back into the UK from a relative who has been living abroad or from the UK to your country of residence. In both cases, a portion of the legacy could be lost in transfer fees and may become subject to the fluctuations of the exchange rate. It makes financial sense to ensure you receive as much of the fund as had been intended, but it can be a lot to manage alone. That is just one of the reasons why we have partnered with exchange experts moneycorp to create Mail Finance Money Transfers, providing great service and expert guidance to help you through the process of transferring money across borders.
If you do need to move money internationally, a competitive exchange rate is vital in order to protect the value of the original sum, whether that is an inheritance or any other source of capital. Currency markets do fluctuate daily and this may have a significant impact on your inherited wealth.
The typical inheritance amount, according to a report compiled by VouchedFor, is around £70,000. The Mail Finance Money Transfers service offers our readers rates that can be more favourable than high street banks by up to 4 per cent*, which on that £70,000 bequest could add up to a difference of £2,800. Timing also plays a part; if you inherit €200,000 from a relative in the Eurozone, you would receive around £170,000 based on the exchange rate at the time of writing. However, if you had transferred that same inheritance back into the UK towards the end of 2015, when the sterling was stronger against the euro, you could have ended up with approximately £30,000 less from the conversion.
You may not be able to control the currency exchange market, but there are ways to plan for exchange rate volatility. For example, you could lock in a prevailing exchange rate by using what is commonly called a ‘forward contract.’ (A forward contract may require a deposit.) Rates can be locked in for up to two years, and given that the average overseas probate process takes between 12 and 24 months , you will be able to set up a contract with a fixed rate, ready for when the funds are released.
Although timing plays a crucial role, it is not the only factor; choosing the right provider can also make a significant difference because you will find varying rates between providers. A specialist provider can also offer additional services, including email and SMS alerts for customers who wish to be kept informed of the movements in the market or to track a particular target rate.
“You may not be able to control the currency market, but there are ways to plan for exchange rate volatility”
The exchange rates are not the only costs to consider; high street banks may charge fees of between £20 and £40 every time you move money overseas. In contrast, our fees start at £5 for an online transfer and up to £15 over the telephone. If there are numerous beneficiaries, these fees can soon add up and these costs will be subtracted from the total received. This is particularly important if you are the executor of an estate with overseas assets or beneficiaries living abroad and may be required to manage multiple transfers to different beneficiaries.
The timing and the provider are the two important factors to consider when making a currency exchange and between them could make a big difference to your final bequest.
moneycorp is a trading name of TTT moneycorp Ltd which is authorised and regulated by the Financial Conduct Authority for the provision of payment services. All customer funds are safeguarded in segregated client bank accounts.