chiefster1976

I wanted to exchange monied from England to Australia but the the rate is obvioulsy not good at the moment...
I would like to know peoples views on where they think the exchange rates may go in the next 6months to a year in general??

At the moment i would like to keep funds in England,maybe a variable or fixed rate bond..
Has anyone got some good advice on the best rates available in the u.k at present?? thanks...gav..

J.P

Hello,

I found out recently that Barclays has a savings account (Monthly Savings) with a rate of 4%... Considering what is going on around it is a pretty good rate! "But".... You cannot save more than £250per month, and it is only for a period of 12 months.

hwilson

Hi, Have a look here:
http://www.moneysavingexpert.com/

Windsor2

Hopefully the following information is useful.

Over the past year, Sterling has been incredibly weak against all its major counterparts amid concerns about the state of the UK economy. Increasing levels of debt coupled with a high dependency on the fragile financial services sector has undermined confidence in the Pound.

Whilst the Australian Dollar has also been very volatile, rising commodity prices coupled with the belief that the Australian economy is better placed to withstand the global turmoil has kept the currency relatively strong.

With the Royal Bank of Australia (RBA) bolting out of the starting blocks ahead of other world economies and increasing interest rates again on the 1st of December 2009 to 3.75%, the Dollar’s allure as a source of higher yield is increasing month on month.

Let’s face it, having your life’s savings sitting in an account earning very little, if anything, is hugely frustrating and the same applies for large institutions and banks, hence the permanent demand to buy Aussie Dollars and accordingly in line with the basic economic principle of supply and demand, as soon as there is a high demand to buy a currency, the value of that currency will climb.

The second factor supporting the Aussie Dollar and all other commodity based currencies is the record breaking gold price we are currently experiencing. With a 40% year on year increase in the price of a fine ounce of gold and the demand for metals in general out of China picking up again, it can come as no surprise that a gold rich economy like Australia has weathered the world downturn much better than service rich economies like the UK. And, a strong economy will often lead to a strong currency.

Going forward, many analysts believe Sterling is still undervalued despite recent signs of recovery. Remember GBP/AUD has recently hit a 25 year low. In contrast, they believe the Australian Dollar is in overbought territory and looking vulnerable to a correction.

Looking ahead over the next 6 and 12 months with GBP/AUD in mind, forecasts from Barclays seem to say that by mid year, we will be around 1.77 and by the end of 2010 the rate should have climbed to 1.88. I suppose these are just one institution’s opinions and so should be taken in that context.

If you are worried about further sterling depreciation, you might want to consider transferring some of the money now and some later. If you look back at the exchange rates, now is certainly a good time to be transferring Aussie Dollars back to the UK as the rates haven’t been this good for many years. That doesn’t mean to say sterling could not appreciate further, but that’s a decision you need to make on risk versus reward.

For anybody sitting on cheap Dollars (traded above 2.20) unsure about whether or not to bring them back into Sterling, a college professor of mine used to say, ‘you cannot make a loss taking a profit’. This is assuming you have a need to have them back in GBP or you have a long time to wait – if need be – to get the funds back into AUD.

Good luck!

Mark

renth

Don't forget to declare interest on your Aussie tax return and any capital gain you make if the exchange rate turns in your favour and you transfer.

JAJ

Unclear why anyone would want to speculate on a foreign currency (sterling) if your future is in Australia.

BAY

Its maybe, that like me, they have a property in the UK and would like to sell it or have sold it to finance buying a property in Australia. If you have several hundred thousand GBP then you are looking at taking a huge hit with the poor exchange rate if you transfer those funds. Instead they may be looking at parking those funds in the UK in the hope the the exchange rate improves.

TheSun

lol, as if anyone really does that!

steve_kelly_and_boys

hi we are in a similiar situation
i have just opened an instant access account with halifax pays 2.8 but they top it up to 3.0 if you open a current account and you pay in £1000 in per month of which they also pay you £5 per month just for doing that
not brilliant but because it is instant access good if you need to change any funds up

renth

I declared the rental income on my house although I sent the sale money over the day I got it so as not to speculate on the forex and to avoid the complications of CGT.

BTW the Aussie authorities are alerted evertime an electronic transfer of over $10k comes in. If you have not declared ownership of foreign assets on your tax return and a wodge of cash comes in for your account, expect some questions from the ATO followed by much pain as they finetoothcomb your finances.

jad n rich

The amount of info aus depts get from each other is mind boggling.

We were informed by medicare and centerlink we had gone overseas simply by taking a holiday, and not informing them. Didnt inform them as our current payments are zippo however they needed to know

ATO and Centerlink and BANK interest details are linked, and your accountant can get all the bank info too.

I can remember people on here ( in the my 'friend' cant pay his debts threads ) saying all this info was private, yeah right they even know if you go OS for the weekend!!

renth

When we rented our first property the landlords wife (who works at HBF) looked at our bank account to check out our "credentials" - how is that possible?

brendarover

Right!

You can make an appointment for an interview by telephoning 13 28 61, then find out for yourself.

OK, i have an input. I recently made a enquiry regarding your above statement in person here;

Brisbane CBD
280 Adelaide Street
Brisbane QLD 4000


I made an appointment and had a chat to a human. Not a forum, but a real human. I would have to agree, you are taxed on your worldwide income, so any savings in the UK, you have to declare any interest recieved while you hold Australian tax residency; well you do not have to, but you are supposed to declare any interest on savings. Some do, some do not, the only ay they would/maybe find out is if you bought the savings into Australia, but you could have had a windfall, a gift, an inheritance, anything, but just use your head. They are an organisation the ATO, not the third reich like some on here will try to portray them as? They do share information the ATO and the HMRC, but lets be honest, they have better things to do than to check the savings interest on Aunty Betty's supersaver account?

Forex gains tax for personal reasons is a smokescreen, never heard of it, talk to loads of expats, loads of Brits in the UK, and now the ATO. No such tax, if you have money in the UK, its up to you when you exchange it, if you do not believe me, make the appointment and ask, they will tell you what i tell you. I was curious because my wife, has a five figure inheritance sitting in a two year fixed rate bond in the UK. She was worried about inheritance tax as she recieved it in sterling in the UK while we are Australian tax residents. There is no inheritance tax in Australia, nor forex gains tax for personal money exchange. I told them she did not want to exchange the money straight away because we may or may not return to the UK and she did not want to lose out if she exchanged now, well when she recieved it, then later decided not to spend it so had to exchange it back to UK Sterling. So we are leaving it in Sterling until we decide what to do, if we benefit from a upside in the exchange rate then its because we waited, if we lose out well its because we waited. But we are waiting, not looking for a gain or a loss. If we gain we gain, but not speculating, just not wanting to exchange, its our money, we may leave it in the UK for good. But i repeat, the representitive had never heard of such a tax when moving money. There is one for business, and one for pensions, but NOT for savings.

No wait for the SS to come along!

renth

http://www.gomatilda.com/news/article.cfm?articleid=327

"Some Examples
1. Consider Susan, who is planning to move to Australia from the UK and has a net £100,000 after the disposal of her former home. She believes that the UK£-A$ exchange rate will move in her favour over the next few months, and upon investigation into which bank account will pay the largest amount of interest on her capital Susan decides to open a new interest bearing bank account that is denominated in UK£’s. Susan then moves to Australia when the exchange rate is £1 = A$2.50 => the equivalent value of her UK£’s is A$250,000.

Three months later the exchange rate has moved to £1 = A$2.70. Susan decides that she wants to buy A$’s at this rate, so she instructs her currency broker to convert all of her UK£’s => she receives A$270,000.

Because the bank account in which the UK£’s were retained was opened after I July 2003 the gain of A$20,000 arising on the disposal of the UK’s and the purchase of the A$’s is assessable as income in Australia, and will be subject to tax in Australia in the income tax year in which the UK£’s are sold. "

JAJ

My observation is that the Australian tax laws on foreign exchange are probably too technical and complex for most people, including most in the ATO (apart from a few specialists) to understand. That's what happen when legislators vote for laws they can't figure out and don't consider unintended consequences.

It might get changed if they get annoyed by certain persons claiming exchange losses as a credit against other income (because the exchange rate rules aren't really a tax per se - you can have a loss just as easily as a gain).

Not declaring interest income from overseas is another matter. This is quite straightforward for them to police as they co-operate with different countries.

As I have said before, once you establish your residence in Australia you've got to start thinking in Australian dollars. As an Australian resident you have no more reason to keep cash in sterling than any other Australian has to put cash in sterling. And while the exchange rate may improve, it may worsen if the British government does not put its financial house in order. So it's simply speculation on the exchange rate.

South Africans have had to get used to a chronically weak exchange rate since around 1985/86 and the same may be true for the United Kingdom going forward.

If you don't want to buy Australian dollars, gold or silver may be better options than keeping cash in sterling. It will probably hold value better over the long term and the tax situation is a lot clearer (capital gains tax, most likely).