Transferring Money to the UK | What's the best way? - Movehub

To send cash into someone's UK bank account, you don't actually ... if you're sending very large sums of money abroad, i.e. over $4,000. Oursiteisreader-supported–byclickingourlinks,wecanmatchyouwithapotentialsupplier,andwemayearnasmallcommissionforthisreferral.LearnMoreHomeInternationalMovingMovingtotheUKfromtheUSTransferringMoneytotheUKTransferringMoneytotheUKCharlieClissittLastupdatedon12Aug2021ShareTweetSendingmoneyabroadusedtobeahugeundertaking.Thankfully,we’relongpastthedaysofpostingchequesabroadandsending‘telegraphictransfers’,andlong,longpastthedaysofsendingbigchestsofgoldcoinsoncreakingoldships. Yes,transferringmoneytodayisamuchsimplerbusiness,buttherearestilllonger,moreexpensiveoptions,andquicker,moreaffordableones.Onthispage,we’lltellyoueverythingyouneedtoknowaboutsendingmoneytotheUKfromtheUS,includingtypicalcosts,usefultips,andthebestwaystodoit. NeedtoconvertyourAmericandollarsintoBritishpoundsterling?It’sbesttoavoidusinghighstreetbanksforthisprocess,asyou’llusuallyhavetopayhighfees,andyouwon’tgetthebestexchangerate.That’swhywe’vedoneourresearchandcomparedallthemajormoneytransferservicesonthemarket,soyoucanchoosetherightone.Checkoutourexpertratingsandfindthebestmoneytransferprovidertoday.What'sonthispage?01|UKmoneytransfers:whyandhow?02|WhatarethebestcompaniesforsendingmoneytotheUK?03|Howmuchdotheycost?04|Howlongdotheytake?05|Minimumandmaximumlimits06|Whatarethetaximplications?07|Howdoyougetthebestexchangerate?08|Whatkeepsmymoneysafe?09|Whatnext?TheLondoncityscapeatdusk,quitepossiblywhereyouneedtosendmoneytoUKmoneytransfers:whyandhow?Whydopeopleneedtopingtheirdollarsoverthepond?Herearethefivemostcommonreasonsforinternationalremittances(afancywordfor‘moneytransfers’):MovingabroadVacationsBusinesstransactionsGiftingmoneytofamily/friendsBuyingpropertyoverseasHowtotransfermoneyfromaUSbanktoaUKbankTosendcashintosomeone’sUKbankaccount,youdon’tactuallyneedtousetheservicesofabank.It’sjustoneofyouroptions. Today,therearetypicallythreeoptionstochoosefrom:banks,P2P(peer-to-peer)currencyexchangeplatforms,andforeignexchangebrokers.Allowustotakeyouthrougheachone.TransferringmoneywithabankThisisthetraditionalchoice.YoucansendaninternationalwiretransferfromonebanktoanotheralongtheSocietyforWorldwideInterbankFinancialTelecommunication(SWIFT)network.TheSWIFTnetworkcomprisesover10,000banksin200+countries,soit’sprettycomprehensive. However,it’salsoquiteanexpensivechoice.ThereareusuallyseveralfeesassociatedwithSWIFTtransfers,suchasthosechargedbythesenderandrecipientbanks,alongwithanychargedbytheintermediarybanks.Unlessthesenderandrecipientbankshaveastrongrelationshipwithoneanother,therecanbeuptothreeintermediarybanksinvolved. Plus,bankstypicallyapplyamark-uptotheexchangerate,whichisusuallyaround4-6%abovethemid-marketrate(theoneyouseeonGoogle). There’smoreinfoonfeesfurtherdownthepage.TransferringmoneywithaP2PcurrencyexchangeplatformInthepastdecade,thearrivalofinternet-basedpeer-to-peerforeigncurrencyexchangeplatformshasreallyshakenupthemarket. Theseplatformsaregenerallymuchcheaperthantheserviceofferedbybanks,mainlybecausetheyusethereal,mid-marketexchangerate,andchargeverylowfees.In2019,theUK’sDailyTelegraphreportedthattheexchangeratesusedbyP2Pplatformswereonaverage4%cheaperthanthoseusedbybanks.Importantly,thesecompaniesalsoofferastronglevelofsecurity,witheveryresponsibleP2PplatformoperatingintheUKbeingauthorisedandregulatedbytheFinancialConductAuthority(FCA). Theseservicesarecalled‘peertopeer’becausetheyliterallymatchyouwithsomeoneelsearoundtheworld.Forexample,ifyou’relookingtosend$100totheUK,acompanylikeWise(formelyTransferwise)willfindsomeonewho’slookingtosend£100(orthereabouts)totheUS,andusethispairingtofulfiltheexchange. Iftheycan’tfindanyonetomatchyourtransferrequest,P2Pplatformswillsimplybuythecurrencyfromtheusualinterbankmarkets–althoughthiscanthenmakethetransfermoreexpensive.CheckoutwhichP2Pcurrencyexchangeplatformsperformedbestinourexperiment. That’swhyexchangesinverycommoncurrency(e.g.dollars,pounds,euros,andyen)areverycheaponP2Pplatforms,becausethere’salwaysdemandonbothsides.Usersliterallytradebetweenthemselveswithoutanydealersgettinginvolved.TransferringmoneywithaforeignexchangebrokerForeignexchange(FX)brokersareusefulifyou’resendingverylargesumsofmoneyabroad,i.e.over$4,000.Theychargefeesfortheirservices,butwilltypicallywaive(orreduce)thesefeesforlargertransfers.FXbrokersalsoaddamark-uptotheexchangerate,butthisisusuallymuchsmallerthanthemark-uptypicallyappliedbybanks. ThekeybenefitofusinganFXbrokeristheabilitytosetupaforwardcontract.Thismeansyoucansetupfutureinternationalmoneytransferswithtoday’sexchangerate,soyouwon’tbeaffectedbyanynegativechanges.ApileofshinyBritishpoundcoinsWhatarethebestcompaniesforsendingmoneytotheUK?There'squitealotofchoicewhenitcomestochoosingamoneytransferprovider,soit'seasytofeeloverwhelmed.That'swhywetackledthewallofchoicehead-on,andconductedanin-depthstudyofthemostpopularcompanies.Ifyouwantmoreinformationaboutourstudyandmethodology,checkitouthere.0outof0backwardforwardOverallgradeTestscoreOutof12.5total.Ourscoringisbasedonindependenttestsandassessmentsoffeatures,easeofuse,support,andcustomerreviews.MinimumtransferMaximumtransferFeesExchangeratemarkupCashpickupsAcceptscreditcardCurrenciessupportedTrustpilotscoreAppStorescoreCustomersupporttelephonelineTryOurno.1choiceWise(formerlyTransferWise)WorldRemitWesternUnionXoomXeMoneyGramRiaOFXCurrenciesDirectMoneycorpA+AABBBCCCC9.758.658.17.857.757.35.955.354.84.5NoneNone$1$8$1None$1$1,000$100$50$1million$9,000$50,000$50,000$500,000$10,000$2,999NoneNone$100,00090%oftransfershavenofeesNofeesexceptviawiretransfer5490130+25604760+55+40+120+4.6stars4.5stars3.74.6stars4.7stars1.6stars4.3stars4.2stars4.8stars4.4stars4.8stars4.8stars4.54.7stars4.5stars4.8stars2.8stars4.8stars3.7stars2.3starsMon-Fri,8am-8pmGMT24/724/724/7Mon-Fri,9am-5pmEST24/7Mon-Sat,9am-7pmGMT24/7Mon-Fri8am-8pm,weekends9am-2pmGMTMon-Fri,7:30am-7:30pmGMTVisitSiteVisitSiteVisitSiteVisitSiteVisitSiteVisitSiteVisitSiteVisitSiteVisitSiteVisitSiteHowmuchdointernationalmoneytransferscost?Itdependsonwhatserviceyou’reusing,howmuchmoneyyou’resending,andhowyou’repayingforit. Ifyouusebankstosendaninternationalwiretransfer,you’llbedealingwithamarkedupexchangerateandasendingfee,whileyourrecipientwillhavetopayareceivingfee. AccordingtoastudybyNerdWalletinOctober2019,themediansendingfeechargedbyUSbanksforaninternationalmoneytransferwas$45,andthemedianreceivingfeewas$15. Meanwhile,onaverage,banksadda4%mark-uptothemid-marketexchangerate. Incontrast,aP2PcurrencyexchangeplatformlikeWise(formerlyTransferWise)chargesaflatfeeof$1.02forsendingdollarstotheUK.Ontopofthis,there’sa0.45%feefortransfersupto$135,000,anda0.35%feefortransfersofover$135,000.Italsodependsonhowyoupayforthetransfer.Forexample,usingadebitcardwithWiseincursa1.25%fee,whileacreditcardincursa3.8%fee. Findouttodayhowmuchit’llcostyoutouseWise.HowlongdoesittaketotransfermoneytotheUK?Again,there’sabunchofvariablesatplaywhichcanaffectthelengthoftimeittakestosenddollarstotheUK.Theseinclude:Theserviceyou’reusing Thenumberofbanksinvolved(SWIFTtransferscaninvolveuptothreeintermediarybanks)Whetherthetransferfallsonaweekend/apublicholidayIngeneral,thestandardlengthoftimeforanyinternationalmoneytransferisbetween0-5businessdays,withbanksgenerallytakinglongerthanP2Pplatforms. Forexample,ifyousendmoneyinternationallywithChaseBank,thefundstypicallywon’tbeavailabletotherecipientbefore3-5businessdays.Likewise,internationalremittanceswithCapitalOnebanktake“3-5businessdays”. Similarly,transferringmoneyabroadwithWellsFargotakes“afewdays”,withtheirexpeditedExpressSendserviceavailableonlytorecipientsinSouthAmericanandAsiancountries. Incontrast,sendingmoneyabroadviaP2PexchangeplatformslikeWiseistypicallymuchquicker.Forexample,insomeinstances,sending$100fromtheUStotheUKviaWisetakesjust“afewseconds”. IfyouchangeyourWisepaymentmethodfromadebitcardtoawiretransfer,“afewseconds”becomes“24hours”.Ifyouincrease$100to$5,000,“24hours”becomes“twodays”.However,itrarelytakesaslongasaninternationalwiretransfer,becausetherearenointermediarybanksinvolved.WhataretheminimumandmaximumlimitsonUKmoneytransfers?Whenitcomestominimumandmaximumlimits,there’susuallyabitofatradeoffbetweenbanksandP2Pplatforms.Generallyspeaking,youpayhigherfeestosendcashviabanks,butyoucansendlargeramountsofcash;meanwhileP2Pplatformskeepfeeslow,butalsoimposesmallerlimitsonhowmuchyoucansend. Forexample,Wiseallowstransfersofnomorethan$2,000perday(ifpayingviadebit/creditcard),whereasBankofAmericadoesn’timposealimitoninternationalmoneytransfers. However,ifyou’renotlookingtosendvastsumsofmoneyabroad,P2Pforeignexchangefirmsalsocomewithveryfavorablerulesforminimumpayments.Wisehasnolowerlimit,andservicessuchasWesternUnionandWorldRemitrequireaminimumpaymentofjust$1. Whilesomebanksalsodonotimposeaminimumlimitonpayments,theirsizeableflatfeescanmakesmalltransfersratheruneconomical.ThehighlandcowsoftheYorkshireDaleshavelittleuseformoneyWhatarethetaximplicationsoftransferringmoneytotheUK?Pleasebeadvisedthatwhileeveryeffortismadetokeepthisinformationuptodate,Movehubdoesnotprovidetaxadvice,andyoushouldalwaysconsultataxprofessionalaboutyouruniquecircumstances.TaximplicationsforthesenderintheUSThebelowinformationissourcedfromfinanceexpertsMichelleMileyandRyanCockerham(writingforTheNest).EveryUScitizencangiftupto$11.18millionintheirlifetimewithoutpayinganygifttax.So,whenyou’refilingyourreturn,youcanchoosebetweenpayingtaxonthegift,orusingupsomeofyourlifetimeexemptionlimit.Crucially,youcangiftanunlimitedamountofmoneytoyourspousetax-freeifyourspouseisaUScitizen. However,beforesendinganymoneyinternationally,it’simportantthatyouconsultwithaprofessionalaccountantand/ortheIRStoensurethatyou’reactinginfullcompliancewithregulations.TaximplicationsfortherecipientintheUKThebelowinformationissourcedfromconversationswithtwotaxexperts:NaveedLasiatXerxesLLP,andKennyMacdonaldatTurcanConnell. Inasimplecase,sendingmoneyfromaUSbanktoaUKbankshouldnotautomaticallygiverisetoataxcharge.IfthatmoneyhasalreadybeenthroughtaxationintheUS,anditisbeingsentasagift,transferringitinternationallyfrombanktobankisinmostcasestaxfree.TaxissuesgenerallyonlystarttoariseiftherecipientisaUKresidentfortaxpurposes,butisnotdomiciledintheUK,andisreceivingthemoneyfromtheUSasaformofoverseasincome(e.g.earningsfromarentedpropertyintheUS,orfromhavingsharesinAmericancompanies).Thatiswhentheremittanceneedsdeclaringonyourtaxreturn. Alternatively,iftherecipientintheUKisnotaUKresidentfortaxpurposes,theyonlyneedtopaytaxonincomeearnedwithintheUK. BeforesendinganymoneyfromtheUStotheUK,westronglyadvisethatyouconsulttheservicesofaqualifiedtaxprofessional,toensurethatyouareactinginfullcompliancewithUSandUKlaw.HowdoIgetthebestexchangeratewhensendingmoneytotheUK?Inmostcases,you’llfindthebestexchangeratewithP2Pforeigncurrencyexchangefirms,astheydon’ttendtoapplyanymark-uptothemid-marketrate. Forexample,dependingonthevariables,Wise’sservicecanbeupto8xcheaperthantheserviceofferedbyhighstreetbanks. However,ifyouplantosendlargeamountsofmoneytotheUKatregularintervals,aforwardcontractwithanFXbrokerwillprobablygiveyouthebestexchangerate.Whatisthemid-marketrate?Areasonablequestion,givenwe’vementioneditafewtimes. The‘mid-marketrate’referstothe‘actual’exchangerate,i.e.theoneyouseeonGoogle.Therateisknownas‘mid-market’becauseit’ssetatthemidpointbetweenthesupplyanddemandforacurrency. Thedifferencebetweenthemid-marketrateandthemarked-upratethatbanksuseisknownasthebank’sexchangeratespread.WhatkeepsmymoneysafewhenIsendittotheUK?TherearegoverningbodiesintheUSandtheUKwhohaveajobtoensurethateverybankandP2Pcurrencyexchangeplatformisoperatingresponsibly,sothateverycustomer’smoneyisprotected.MoneytransfersafetymeasuresintheUSTheConsumerFinancialProtectionBureau(CFPB)isaUSagencythatoverseesallinternationalmoneytransfersexceeding$15.Itensuresthatthefinancialmarketsremainfairforconsumers,stipulatingthatanindividualmustbeabletoseeallcostsbeforesendingmoneywithabankoraP2Pplatform. There’salsotheFinancialCrimesEnforcementNetwork(FinCEN),whichrequiresallP2PplatformsbasedintheUStoberegisteredaslicensedmoneytransmitterswiththeirrelevantstatebankingdepartment.MoneytransfersafetymeasuresintheUKMeanwhile,anyP2PcurrencyexchangefirmswithregisteredofficesintheUKareadministeredbyHMRC,sothey’reobligedtofollowallUKMoneyLaunderingRegulations. Plus,as‘paymentinstitutions’,allmoneytransferfirmsaremonitoredbytheFinancialConductAuthority.Beforesendingyourmoneywithanycurrencyexchangecompany,youshouldchecktoseeifthey’reontheFCAregister.Whatnext?Hopefullyyou’refeelingalittlemoreclueduponhowtotransfermoneyfromtheUStotheUK.Asyoucansee,therearemultipleoptionsavailabletoyou,andtheyeachcomewiththeirownbenefits. Ifyou’retemptedbyaP2Pforeigncurrencyexchangeplatform,looknofurtherthanWise.CharlieClissittEditorYorkshire-bornandLondon-based,Charliehasbeenresearchingandwritingaboutinternationalrelocationforoverfouryears.He’sawell-travelledindividual,althoughweirdlyhe’sstillneverbeentoScotland.AGlobalGuidetoPetRelocationCosts2021InternationalContainerShippingCosts202111TopTipsforMovingOverseasCheaply2021PopularAdviceGuidesAGlobalGuidetoPetRelocationCosts2021InternationalContainerShippingCosts202111TopTipsforMovingOverseasCheaply2021PopularRoutesShippingfromUSAtoUKShippingfromAustraliatoUSAShippingfromUKtoNewZealandShareTweetBacktoTop