PoppetUK

Hi there,

I am sure these sorts of questions have been asked before but I wonder if there is someone out there that knows why the exchange rate is dropping. I know that is a silly question as there would be a very rich person sitting at home but is there anything obvious that has caused the drop that I should be aware of. I want to exchange a fair amount of money so the drop from 2.41 to 2.35 makes a bit of difference.

Any advice would be appreciated.

PoppetUK

nev_n_angie

Have no clue on this one - we transferred at 2.49 in Late Jan - Early Feb!

Got more to go across in October, so hopfully things will sort themselves out - if not, I think the window is 6months after you get there to do it without Tax Implications....not too sure though! It seems to bedifferent depending on who you ask!!!

Angie

Centurion

There are no implications for transferring your money to Australia taxwise. The 6 month thing is a complete BE urban myth.

You will however, have to declare for tax on any INTEREST you receive on money in the UK when you are an Australian tax resident.

renth

I believe there are also capital gains implications if you wait for a good exchange rate.

AK and CR

Thats true. If your rate was say 2.35 when you emigrated and left your money in the uk and months later you got it transferred at say 2.55, you would pay capital gains tax on the difference.

I see to remember Alan Collett writing a full post about this.

Wait until 1st July when all the year ends figures and new budgets come out. This may make a difference but if you are lucky then you are lucky.

Id rather pay tax on it going up a few points than not!

My missus transferred her money and for every .1 it went up or down she lost 6 grand. She based her figures initially on 2.35. She got it transferred earlier this year for 2.51. She made 10 grand more than she though she was going to get! Not bad. Even at whatever she gets taxed she would still be better off waiting for that higher rate.

If you sign up for ozforex.com you can get email alerts sent to you when it reaches a certain level (that you set) so if yuou are waiting for 2.4 or 2.5 say. you can do 6 alerts so i usually do 2.44 - 2.5. You get an email to tell you. Good service. I think youcan even get a text message sent to your phone too.

Good luck

Aj

ridds

To address one of your questions about what influences the exchange rate...

The Aussie dollar floated on the currency markets in December 1983. Australia is still predominantly a commodity exporting country, and our dollar is linked to this. Commodity prices are highly volatile, and are driven primarily by the strength or weakness of the world economy, represented by OECD industrial production. Peaks and troughs of the world commodity price cycle are highly correlated with Australia’s terms of trade, and therefore the exchange rate (i.e., increased demand for Australian exports = (more or less) a strengthening Aussie dollar exchange rate.) It is also impacted by the levels of foreign investment and of course speculative currency trading (it is apparently the 5th most traded currency in the world).

chels

And what would happen if the rate dropped - would you get money back from the Government?

As Centurion said, it's a BE myth.

Alan Collett:
...capital can generally be transferred to Australia on a free of tax basis.

http://britishexpats.com/forum/showt...ighlight=gains

renth

I think it would count as a capital loss which you could offset against a future capital gain.

This is the point I remind everyone to seek professional advice.

chels

renth - you're right. Professional advice is best with this scenario. I've read further into this, and it's a bit of a minefield with conflicting opinions...