An increasing number of us have loved ones who live abroad. In the event that the worst happens, it can prove rather challenging to have to navigate the process of transferring your inheritance over from abroad.

The good news is that Moneycorp is on hand to provide support. We’re here to cater to your individual needs and make the inheritance transfer process as quick and easy as possible.

Inheriting money from overseas

Inheritance can come in a variety of forms, including savings, real estate, and retirement funds. When inheriting money from overseas, you’ll need to have a good awareness of the costs that are incurred by foreign currency transactions.

Many high street banks provide poor exchange rates and incur large transfer fees, and so you may find that sending money abroad is more costly than you anticipated. As foreign exchanges specialists, Moneycorp are here to ensure that you can transfer your inheritance from abroad at a competitive exchange rate whilst also enjoying low fees.

Whether you’re living abroad and have inherited money from the UK, or you have received an inheritance from an overseas relative, we can assist with your currency exchange needs. Our guide on the taxes that are levied on money received from overseas provides guidance regarding the additional costs that you can expect to pay when handling a transfer of inheritance.

Inheriting a foreign property

If you have inherited a property located abroad, there may be maintenance fees and other costs that you need to consider. These costs can include existing mortgages, in which case you may be obliged to send regular mortgage payments abroad.

If, on the other hand, you have inherited a foreign property that you do not wish to keep, we can assist with your currency exchange needs when you decide to sell your property abroad, helping ensure that repatriate a greater share of the funds from the property sale.

With our international payments account, you can set up payments and pay bills at any time of the day through our secure online platform and mobile app. This account allows you to arrange weekly and monthly regular international payments, and you can also secure a prevailing rate for up to two years of your international payments by entering into a forward contract (please note that this may require a deposit).

Expert guidance and support

You can trust our team to deal with your currency exchange needs in a sensitive, professional manner when it comes to the matter of repatriating funds and paying fees on your foreign inheritance. You can contact our team of currency specialists by phone or email, and our dedicated account managers will guide you through the real estate inheritance transfer process, ensuring that you have more time to focus on what’s most important.

How to protect your inheritance when transferring money abroad

Repatriating an inheritance from overseas involves converting foreign currency into one’s home currency. You will need to secure the best possible foreign exchange rate, therefore, to protect any foreign inheritance that you stand to receive, and you will also need to ensure that you avoid paying high transfer charges.

Currency exchange specialists almost always offer better exchange rates than high street banks, which often charge margins of up to 5% above the exchange rate. This makes a great deal of difference when large sums of money are being transferred: if, say, you wanted to transfer the equivalent of £150,000 from abroad, you could lose up to £7,500 of your estate assets.

Using a money transfer service like Moneycorp to transfer an inheritance from overseas is a great way to secure a competitive currency exchange rate.

How to protect yourself against high currency exchange rates

The most basic step that you can take to protect against high foreign exchange rates is to choose a provider that offers competitive FX rates. There is a great deal of variation in the markup that is added onto exchange rates, with money transfer providers typically charging a markup rate of 0.5-3%, and banks often using a markup rate of 5-6%. Taking the time to find the best exchange rate when repatriating an inheritance could help you save thousands of pounds. As currency exchange specialists, we are well-placed to assist you here; we have a strong purchasing power with our counterparty banks as we transact over £38 billion in currencies each year, meaning that we are able to pass on smaller margins to our customers than might be achieved directly through their bank.

Another way to protect your assets from high currency exchange rates is to secure an exchange rate in advance. We can help you lock in the prevailing exchange rate for up to two years with a forward contract. Forward contracts allow you to hedge against future currency volatility, and they are an ideal solution if you’d like to transfer your inheritance funds and convert them to your home currency but cannot immediately do so.

What are the tax implications you should be aware of and where to look for help?

Overseas property is not subject to inheritance tax in the UK in cases where the property in question had been owned by individual domiciled abroad. HMRC will regard your relatives as having been domiciled in the UK if they lived in the UK for 15 of the last 20 years, or if they had their permanent home in the UK in the last three years of their life.

In cases where the deceased individual is not judged by HMRC to have been domiciled abroad, there is still no obligation to pay inheritance tax in the UK in the following circumstances:

• The estate is below the £325,000 threshold
• Any inheritance above this threshold had been left to a spouse, civil partner, charity or community amateur sports club

Do you have to pay tax?

If your deceased relative is judged to have been domiciled abroad, you will only be liable, under the double taxation conventions that are in place, to pay inheritance tax on foreign assets if the country in which they had been living charges inheritance tax on that property (although you may also be liable to pay taxes in your home country on specific types of assets, such as immoveable property, i.e. land). The UK has double taxation conventions in place with the Republic of Ireland, South Africa, the USA and the Netherlands.

If both the UK and the country in question charge inheritance tax, you can either avoid or reclaim this tax through one of these double taxation conventions. In cases where there is no double taxation agreement in place, you may be entitled to apply for relief under Unilateral Relief provisions.

What is the difference between banks, currency brokers and Moneycorp?

Currency brokers and most banks offer international currency exchange services. It is here that the similarities end, however; whilst banks allow you to exchange foreign currencies, they are not exchange specialists. Currency brokers, on the other hand, specialise in buying and selling foreign currencies. What this means is that banks are not able to offer a service that is tailored to your needs, whilst brokers are more likely to offer currency forwards and other instruments that will enable you to save money and reduce your exposure to exchange rate volatility.

Banks offer a far less competitive service than brokers with regard to foreign exchange rates and international money transfers; while banks charge an exchange rate mark-up of up to 5%, most currency brokers aim to charge up to just 1%. This means that using a bank will often incur far greater costs, especially when large sums of money are being exchanged. Banks also tend to charge more for international payments than currency brokers.

At Moneycorp, we like to think we sit uniquely in the middle – we provide the security of a bank, specialist support of a boutique broker and the seamless technology of a fintech. We can help you transfer your money overseas in a quick, straightforward fashion, and our competitive rates of exchange have helped both our personal and corporate customers save money on their international money transfers.