Choosing which way to send money overseas can depend on how much you are sending, how often it will be sent, how the person at the other end wants to receive it - and how soon they need it. The most common ways are:
- International Money Transfer
- Using a bank or building society
- High street transfer companies
How do the main methods differ?
International Money Transfers, online with foreign exchange brokers, are fast, usually the best option for larger amounts (over £3000) and usually need a small fee. Exchange rates can usually be better than with banks. All you need to do is provide bank or credit card details and set up a password.
Using a bank can take longer, and may be useful for smaller, regular payments, though you’d need to set up an International Bank Account Number (IBAN) and Bank Identifier Code (BIC).
High street transfer companies don’t require you to set up an account - you get a reference number to give the recipient - but can be more expensive.
Making sure your overseas money transfer is safe
If you are sending money abroad, whether a small sum or a large amount, you want to make sure it is protected. Firms that provide payment services such as money transfer are usually required to be authorised or registered with the Financial Conduct Authority (FCA), this can be checked by searching the financial services register.
Ways to send money safely
- Make sure that your money transfer firm is authorised by the FCA
- Keep hold of paperwork and receipts to protect yourself in case something goes wrong
- Let the recipient know how they will receive the money and ensure all details are correct
- Get firm information beforehand about costs and charges, and whether or not the money you are sending is safeguarded
- If you have to use a password, use one that is unique and hard to guess, with a mixture of upper/lowercase and numbers/symbols - try not to use birthdays or maiden names
What are the laws on sending money abroad?
FCA-authorised firms are obliged to safeguard relevant client funds by keeping it separate from company funds, so that if anything goes wrong – e.g.: the company goes out of business - you have the best chance of getting your money back, though unlike banks, many money transfer firms and foreign exchange brokers are not covered by the Financial Services Compensation Scheme (FSCS).
Are there tax implications?
If you’re sending money back to the UK, it depends really on whether you are ‘domiciled’ in the UK or abroad. This usually means simply where you live, but legally where you ‘belong’. If you’re not a UK resident, you don’t have to pay tax on what you send back to the UK, but if you are a UK resident you normally do - unless your ‘domicile’ is abroad.
How Telegraph Financial Services can help with international money transfers
If you are transferring money abroad for any reason - for example to buy a property, to pay for a wedding or to fund student fees, international money transfers can help you get the best deals that suit you and your needs - and with a personal service to guide you through the process.
Enjoy competitive exchange rates, a secure service and your first transfer FREE with Telegraph International Money Transfers
The above article was created for Telegraph Financial Solutions, a member of The Telegraph Media Group. For more information on Telegraph Financial Solutions click here
Information correct at date of publication.