Receiving Inheritance in Foreign Currency

[Major Tom]

My share of an inheritance will be coming to me in the next few weeks and I have to figure out how to receive it, as it is in British pounds sterling.

A family member, who is in the UK, has offered to have it transferred electronically to my bank here in the US but I am inclined to ask for a paper check to be sent to me as I don't know what fees, if any, the originating bank will charge for the transfer. My bank (Bank Of America) don't charge any transaction fees for a deposit of foreign currency, other than the fees which are built into their exchange rate from pounds sterling to US dollars.

I figure that if I ask for a paper check, that will save on any fees that the originating bank in the UK might charge for an electronic transfer.

Has anyone here been through anything similar or can help with suggestions? It's a pretty significant amount of money - about US $147K

 

[nun]

My share of an inheritance will be coming to me in the next few weeks and I have to figure out how to receive it, as it is in British pounds sterling.

A family member, who is in the UK, has offered to have it transferred electronically to my bank here in the US but I am inclined to ask for a paper check to be sent to me as I don't know what fees, if any, the originating bank will charge for the transfer. My bank (Bank Of America) don't charge any transaction fees for a deposit of foreign currency, other than the fees which are built into their exchange rate from pounds sterling to US dollars.

I figure that if I ask for a paper check, that will save on any fees that the originating bank in the UK might charge for an electronic transfer.

Has anyone here been through anything similar or can help with suggestions? It's a pretty significant amount of money - about US $147K

Do the electronic transfer. It's usually a few 10s of bucks in fees. The paper check route will also cost money as you'll have to get a foreign draft ie the British bank will issue a check in dollars drawn on a US bank. If you get a British check drawn on a UK bank it will be a pain to get it cashed.
For that amount of money simply give the executor of the estate your bank details and do the electronic transfer. It's quicker, safer and there won't be much cost difference.

Also remember to declare this inheritance in your US taxes. There's not tax due, but it has to be declared to the IRS. Finally make sure you get everything sent to the US, don't keep money in UK accounts or investments as you may end up having to file FBAR forms and deal with tax on foreign accounts, which is just a pain in the neck.

 

[Alan]

I second Nun's suggestion. I would do an electronic transfer in $ to your US bank. I wouldn't mess with paper checks.

 

[Meadbh]

Been there, done that. Do the electronic transfer as Nun says. If you go the check / cheque route, not only do you have the formalities of acceptance, but you waste time and forgo interest on the deposit. And cheques can get lost.

Congratulations!

 

[Major Tom]

Thank you for the replies - and so quickly too. Well that answers the questions of what ER's do all day.....

I think I'll go with your recommendations to go the electronic route. After that, a few nice dinners with family and friends, a short local trip, and everything else will go into the portfolio. It will give me a little more breathing room with my plans for ESR, which is very welcome.

 

[FIREd]

Are you sure you want to convert those pound sterling to US dollars? I keep money from European inheritances in a bank in Europe.

 

[heikejohn]

I had German Euro wire-transferred into my account. The wire fee was $15.00 on my end, E10.00 in Germany, and 4% of the total amount in exchange fees. (Which was not disclosed & described as "Competitive Market Rate" when I traced it down.)
That part will be the most painfull in your transfer.
Otherwise it was easy!!

 

[Major Tom]

FD - Definitely want to convert to US dollars. I haven't had any European income since I immigrated to the US a couple of decades ago and don't want to complicate my taxes at this point.

heikejohn - agreed about the hefty chunk that is taken out in exchange fees. I don't think there is any way I can avoid that with this kind of amount

 

[kumquat]

If you have an online brokerage account, something like this might eliminate the currency conversion fees. It works well for Canucks converting C$ to/from US$ and a version may work for you if your discount broker has access to the London Stock Exchange. Edit to add: and the ability to give you a GB pound account.
Norbert's Gambit - finiki

 

[NW-Bound]

Has anyone here been through anything similar or can help with suggestions? It's a pretty significant amount of money - about US $147K

I can suggest how to spend that money!

We were talking about a motor home the other day on a different thread.

 

[nun]

Are you sure you want to convert those pound sterling to US dollars? I keep money from European inheritances in a bank in Europe.

Unless there's a particular reason for keeping the money in Europe I think it's more trouble than it's worth. FBAR filing, foreign tax filing and having to stick with saving accounts or individual stocks to avoid PFIC rules are reasons I'd get the money to the US.

 

[haha]

My share of an inheritance will be coming to me in the next few weeks and I have to figure out how to receive it, as it is in British pounds sterling.

A family member, who is in the UK, has offered to have it transferred electronically to my bank here in the US but I am inclined to ask for a paper check to be sent to me as I don't know what fees, if any, the originating bank will charge for the transfer. My bank (Bank Of America) don't charge any transaction fees for a deposit of foreign currency, other than the fees which are built into their exchange rate from pounds sterling to US dollars.

I figure that if I ask for a paper check, that will save on any fees that the originating bank in the UK might charge for an electronic transfer.

Has anyone here been through anything similar or can help with suggestions? It's a pretty significant amount of money - about US $147K

Do not fool with checks. Get the bank wire.

Ha

 

[Major Tom]

If you have an online brokerage account, something like this might eliminate the currency conversion fees. It works well for Canucks converting C$ to/from US$ and a version may work for you if your discount broker has access to the London Stock Exchange. Edit to add: and the ability to give you a GB pound account.
Norbert's Gambit - finiki

It looks like a creative way around the problem, but as a passive index investor who does little more than re-balance occasionally, it's a bit more than I want to get into. Thanks for the suggestion though. I'll most likely let the bank do the conversion to US dollars and take the hit.

I can suggest how to spend that money!

We were talking about a motor home the other day on a different thread.

NW-Bound - It was you who was responsible for making me realize that I need a Lazy Daze instead of a Roadtrek when you posted that fabulous picture of Andrew Baird's mobile office. I'm planning on full-timing and being realistic, will need just a little more space than a Roadtrek can give me. Current plan is a used Lazy Daze - one of their former employees lives in my neck of the woods and is available to inspect used rigs. It looks like the planets will align sometime later this year

 

[NW-Bound]

NW-Bound - It was you who was responsible for making me realize that I need a Lazy Daze instead of a Roadtrek when you posted that fabulous picture of Andrew Baird's mobile office. I'm planning on full-timing and being realistic, will need just a little more space than a Roadtrek can give me. Current plan is a used Lazy Daze - one of their former employees lives in my neck of the woods and is available to inspect used rigs. It looks like the planets will align sometime later this year

All right! Full-timing too!

Get a toad to go with your class C. I trust that you have read Andy Baird's blog to see what works for him. I have found the experience that he shares most useful to me, who knew nothing about RV'ing when I started out.

Glad I was able to pass on the discovery of the joy of RV'ing, which I learned from this forum myself, from a thread by audrey1. The blog by Andy Baird was the first blog I read on any subject, not just RV'ing. That blog, I ran across from a mention by Martha.

Man, the way more people are taking to RV'ing, it is going to be harder to find camping slots. I hope more people will stick to those bus size RVs, which means they will not be able to squeeze into the NP campgrounds to compete with me.

 

[MooreBonds]

It looks like a creative way around the problem, but as a passive index investor who does little more than re-balance occasionally, it's a bit more than I want to get into. Thanks for the suggestion though. I'll most likely let the bank do the conversion to US dollars and take the hit.

Major Tom - I'd strongly suggest looking into kumquat's suggestion. I don't believe kumquat was suggesting keeping a brokerage account open in London to buy London-traded securities, but rather utilizing the international business arm of a major brokerage (Ameritrade, Vanguard, Fidelity or E-Trade) that you perhaps already have an account with who deals with foreign currencies on a daily basis (and perhaps more able to give you a competitive rate on the conversion and/or lower fees).

Regardless of whether you work with a large broker or a US-based bank account, given the $ involved, it's worth it to call around to get quotes on the exchange rate. Just a scant 15 minutes of your time calling a few international banks could easily save you hundreds (even thousands!) of dollars. Wish I could get that payoff for such a small effort!

 

[Texas Proud]

Like other have suggested... I would ask about all fees prior to having the money sent.... some banks have a percentage fee for the exchange in addition to the exchange (which rate might be to their benefit)..

 

[nwsteve]

Regardless of whether you work with a large broker or a US-based bank account, given the $ involved, it's worth it to call around to get quotes on the exchange rate. Just a scant 15 minutes of your time calling a few international banks could easily save you hundreds (even thousands!) of dollars. Wish I could get that payoff for such a small effort!

AMEN on this advice. I just got to believe if you call Fido or Vanguard and tell them you have approx 150K inheritance coming from an English relative and ask how could they get the money into your account, your chances of getting the lowest costs go way up.
I have a relationship w/Fido and get no cost foreign exchange on my debit card and free wire fees.
Good luck
Nwsteve

 

[haha]

AMEN on this advice. I just got to believe if you call Fido or Vanguard and tell them you have approx 150K inheritance coming from an English relative and ask how could they get the money into your account, your chances of getting the lowest costs go way up.
I have a relationship w/Fido and get no cost foreign exchange on my debit card and free wire fees.
Good luck
Nwsteve

Fidelity, Etrade and likely several other US bokerages can give you a stock trading facility in British Pounds, if you want to keep some of this currency in pounds. Practically speaking you would be pretty much limited to owning stocks and cash in the account.

Ha

 

[Major Tom]

I called Vanguard (my broker) and they told me that the conversion to US dollars is out of their control. They have an account with HSBC for the purpose of receiving incoming wire transfers, so to get money from the UK into Vanguard I need to have it wired into their HSBC account, and let HSBC take care of the currency conversion. Getting accurate information from HSBC customer service was like pulling teeth, and their exchange rate differs very little from what Wells Fargo or B of A would give me (both of whom had excellent telephone customer service).

I did learn today that the exchange rate that banks give for wire transfers is significantly better than those for exchanges from paper currency (makes sense) and that the rate I will get from Bank Of America or Wells Fargo is not much lower than the rate quoted by xe.com or the google currency converter.

If I assume that the rates quoted by xe.com and the google currency converter are pretty close to the wholesale rates, then the rate I will get from B of A or Wells Fargo represents about a 1.75% fee to them - not bad at all.

I don't want the ability to trade in pounds so am going to have the money wired straight into my Bank Of America checking account. Nice and easy, and it seems as if I will get a fair deal out of it.

Thanks for all the advice - it was much appreciated.

 

[Pajaro]

I've spent the better part of the last decade stationed abroad, so I have thought about your problem (exchanging funds and getting them back home) quite often. I'm sure there is some British guy who just inherited U$S147K and is trying to figure out a way to convert it to pounds and get it to Britain. Some smart person (and I'm not that person) will someday start the web service to link up the two of you so you can trade the money without conversion or moving.

In fact, I bet there is a US military member stationed in England right now who has an English wife and is looking to buy a house. However, he gets paid in dollars and the conversion to pounds will be pricey. If any of you want to start the business and profit from my idea, please have at it so I can use the service!

 

[samclem]

"Dear American Friend,

My name is Ngkoka Kgnonji, I am the son of the recently deceased finance minister of Nigeria. The generous inheritance I have of recently received from my father is presently safekeepingly kept in the Bank of Nigeria. I could use your assistance of converting the sum into US dollars (over three millions at today's exchange rate) and moving it to a US bank. For your assistance in this matter, I will pay you a fee of 15%. Please contact me at this email address. Time is of the essence, as the situation here is turbulent."