Exchange Rate
#196
Re: Exchange Rate
Interest rates are put up to keep inflation in check. The rate of inflation is under the target rate, so it is possible that rates will drop in the UK. There is an interest rate rise tipped in Australia before Christmas if it happens will strengthen the dollar. If on the other hand something happens with the money markets as in the case of the recent US crisis ?? Who can say.....
I hear that Farmers Dipstick in the 3:15 at Kempton Park is a dead cert...
S
#197
Forum Regular
Joined: Jun 2007
Posts: 216
Re: Exchange Rate
OH says Uk interest rates are tipped to go down by half percent next month (i think) so that doesn't bode well re the above.
Somethings got to give soon though. Remember that rates go up and down all the time so just be stoical and hope for best. If exchanging now at 2.30 gives you enough for what you wanted to do (i.e. doesn't completely fox things) then worth considering. If on other hand current rate negates the financial benefits of going then might as well wait...
Somethings got to give soon though. Remember that rates go up and down all the time so just be stoical and hope for best. If exchanging now at 2.30 gives you enough for what you wanted to do (i.e. doesn't completely fox things) then worth considering. If on other hand current rate negates the financial benefits of going then might as well wait...
Interest rates are put up to keep inflation in check. The rate of inflation is under the target rate, so it is possible that rates will drop in the UK. There is an interest rate rise tipped in Australia before Christmas if it happens will strengthen the dollar. If on the other hand something happens with the money markets as in the case of the recent US crisis ?? Who can say.....
Last edited by walkermat; Sep 27th 2007 at 2:23 pm. Reason: typo
#198
South Yarra Sheila
Joined: Apr 2007
Posts: 1,078
Re: Exchange Rate
Unfortunately we have to go. I left work 2 months ago and gotta start earning. Work in Oz starts mid Oct. We are leaving as much as poss here and transfering the bare minimum.
You are not helping I joke, you are lots! It is a risk, but i'm gonna leave most £ here in a high interest account. And then just keep fingers crossed and as much panic at bay as i can
You are not helping I joke, you are lots! It is a risk, but i'm gonna leave most £ here in a high interest account. And then just keep fingers crossed and as much panic at bay as i can
#199
Forum Regular
Joined: Jun 2007
Posts: 216
Re: Exchange Rate
And still it tumbles... (Or if you are going the other way 'Yeeeeah, still going up up up go baby baby!!!! yeeehar!!!)
OH has told me to stop telling her. Still we are making interest on the dosh so must stop being sooo miserable about it.
OH has told me to stop telling her. Still we are making interest on the dosh so must stop being sooo miserable about it.
#200
South Yarra Sheila
Joined: Apr 2007
Posts: 1,078
Re: Exchange Rate
OH is right! Just set an alert rate with Ozforex and stop obsessing about how crap it is right now! I know it's going to improve soon-things always do
#201
Re: Exchange Rate
Unless the ATO have changed the rules recently, be aware that you will be creating a tax liability for yourself if you leave GBP in the UK and wait until the rate improves before transferring the remaining funds.
So for example, if you have £100,000 and the rate today is 2.3,
then that = $230,000 AUD.
If you wait for an rate iimprovementand it hits 2.50 in say 6 months and you choose to transfer then...
then that = $250,000...
A gain of $20,000 which may be subject to tax by the ATO.
I would suggest you seek clarification before you make a decision.
Can you get a higher rate of return here in Aus than in the UK that would offset any pperceivedloss in the exchange rate?
Cheers,
Mark.
So for example, if you have £100,000 and the rate today is 2.3,
then that = $230,000 AUD.
If you wait for an rate iimprovementand it hits 2.50 in say 6 months and you choose to transfer then...
then that = $250,000...
A gain of $20,000 which may be subject to tax by the ATO.
I would suggest you seek clarification before you make a decision.
Can you get a higher rate of return here in Aus than in the UK that would offset any pperceivedloss in the exchange rate?
Cheers,
Mark.
#202
Forum Regular
Joined: Jun 2007
Posts: 216
Re: Exchange Rate
Unless the ATO have changed the rules recently, be aware that you will be creating a tax liability for yourself if you leave GBP in the UK and wait until the rate improves before transferring the remaining funds.
So for example, if you have £100,000 and the rate today is 2.3,
then that = $230,000 AUD.
If you wait for an rate iimprovementand it hits 2.50 in say 6 months and you choose to transfer then...
then that = $250,000...
A gain of $20,000 which may be subject to tax by the ATO.
I would suggest you seek clarification before you make a decision.
Can you get a higher rate of return here in Aus than in the UK that would offset any pperceivedloss in the exchange rate?
Cheers,
Mark.
So for example, if you have £100,000 and the rate today is 2.3,
then that = $230,000 AUD.
If you wait for an rate iimprovementand it hits 2.50 in say 6 months and you choose to transfer then...
then that = $250,000...
A gain of $20,000 which may be subject to tax by the ATO.
I would suggest you seek clarification before you make a decision.
Can you get a higher rate of return here in Aus than in the UK that would offset any pperceivedloss in the exchange rate?
Cheers,
Mark.
#203
Re: Exchange Rate
the rate is terrible isnt it? i have my "wages" sitting there waiting to be transferred but trying to hold off... strange as when we moved 2 years ago the rate was this low too!!!
#204
Victorian Evangelist
Joined: Sep 2005
Location: Melbourne, by the beach, living the dream.
Posts: 7,704
Re: Exchange Rate
Buzzy
#205
Forum Regular
Joined: Jun 2007
Posts: 216
Re: Exchange Rate
PR me
#206
Re: Exchange Rate
Mark
#207
done and dusted
Joined: Sep 2006
Location: perth
Posts: 181
Re: Exchange Rate
crap, current rate is the lowest its been for 12 months
#208
Banned
Joined: Aug 2007
Posts: 375
Re: Exchange Rate
Just want to clarify something here, I did not know and others might want to know?
Just for example below?
You have gained a PR visa.
You have to validate by 01/01/08 - 1 Year from Meds date
You have to enter no later than 01/10/12 - 5 Year period from grant
You have £100,000.00 in you building society account in the UK. (Lottery Win)
You validate and enter and stay for good, but do not move your £100,000.00 over to Australia for one year, waiting until the exchange rate improves.
The rate on initial entry is 2.3 to 1
The rate one year on is 2.6 to 1
You move your money now the rate is 0.3 higher.
You have waited, and gained $30,000.00 dollars, are you saying you must pay tax on this gain of $30,000.00? Even though it is still in the UK building society for that year?
BTW, you have received interest, and paid tax on the interest to the Australian tax man, as you receive your interest gross in the UK.
Second scenario.
The same above applies, but:
You leave the money in the UK, for x amount of time, say ten years, how do you know what the difference is between the rate at entry and the rate when you decide to change the money over to dollars?
Are you saying you must log the rate on entry, so as and when you move the money, you can calculate the differential?
If this is true then you are best to enter when the rate is at its peak, that way you cannot lose, as the only way the rate will go is down, so no tax to pay on the differential?
Third Scenario
I only ask, say you come over stay for two years on a PR, return to the UK for two years, then come back to Australia for good. But in this time, you leave your money in the UK.
It can get very complicated?
I would have thought, it’s your choice when you exchange, so long as you pay tax on the interest to the tax man of country of residence?
Otherwise only make permanent entry when the rate is at its peak, and log it?
Just for example below?
You have gained a PR visa.
You have to validate by 01/01/08 - 1 Year from Meds date
You have to enter no later than 01/10/12 - 5 Year period from grant
You have £100,000.00 in you building society account in the UK. (Lottery Win)
You validate and enter and stay for good, but do not move your £100,000.00 over to Australia for one year, waiting until the exchange rate improves.
The rate on initial entry is 2.3 to 1
The rate one year on is 2.6 to 1
You move your money now the rate is 0.3 higher.
You have waited, and gained $30,000.00 dollars, are you saying you must pay tax on this gain of $30,000.00? Even though it is still in the UK building society for that year?
BTW, you have received interest, and paid tax on the interest to the Australian tax man, as you receive your interest gross in the UK.
Second scenario.
The same above applies, but:
You leave the money in the UK, for x amount of time, say ten years, how do you know what the difference is between the rate at entry and the rate when you decide to change the money over to dollars?
Are you saying you must log the rate on entry, so as and when you move the money, you can calculate the differential?
If this is true then you are best to enter when the rate is at its peak, that way you cannot lose, as the only way the rate will go is down, so no tax to pay on the differential?
Third Scenario
I only ask, say you come over stay for two years on a PR, return to the UK for two years, then come back to Australia for good. But in this time, you leave your money in the UK.
It can get very complicated?
I would have thought, it’s your choice when you exchange, so long as you pay tax on the interest to the tax man of country of residence?
Otherwise only make permanent entry when the rate is at its peak, and log it?
#209
done and dusted
Joined: Sep 2006
Location: perth
Posts: 181
Re: Exchange Rate
bugger it seems to be nosediving again 2.270
#210
done and dusted
Joined: Sep 2006
Location: perth
Posts: 181
Re: Exchange Rate
trouble is, theres nothing on the horizon to stop the AUD, GBP is actually doing pretty well against the US dollar, trouble is the AUD is doing better, bloody americans, one thing to note is that oz inflation is a little low inthe last 2 months, and all we can do is hope that the RBA decides to drop interest rates slightly to encourage growth, but i cant see it to be honest