lansbury

The IRS average rate for 2016 is £1 = $1.2987 ($1 = £0.77)

https://www.irs.gov/individuals/inte...exchange-rates

theOAP

Thanks for the alert, lansbury.

tom169

Cheers! This works out better for me than the XE I was going to file with

lansbury

Always wait for the IRS rate. They use a rate you would actually get in the market place, the others use the mid rate. The difference is normally between 5 and 6 cents, which can mean a fair amount not going out your pocket in taxes.

XE certainly use the mid rate, not even the rate they use in practice.

mrken30

If you want interbank exchange rates you can look up previous rates at

https://www.oanda.com/currency/average

They have the 2016 average as

bid 1.35585 ask 1.35635

This is quite a difference

You can also look up credit card rates.

I am going with the IRS average rates as they give me a better deal

Olly_

Thanks for this, I've just updated my bank interest spreadsheet

tom169

I'm not the only one who did this then. Certainly a really easy way to work it out once you've got the formulas in.

theOAP

Spreadsheets become a necessity for some of us, especially when retired and living in the UK. Two supporting spreadsheets are: 1) a sheet for multiple UK interest payments which will use the IRS unofficial rate, to be used for Schedule B, and 2) a sheet for 8938 and FBAR using the Treasury rate to determine the highest balance during the year. Since there may also be pensions from the Euro zone, the $/Euro exchange rate comes into play also on the second sheet.

A master sheet for calculation of 1040 uses the IRS unofficial rates, but the question arises as to which exchange rate to use for Euro pensions, the £/$ since that is the amount you actually receive in your bank account, or the $/Euro since that is the amount you were actually paid at source. I use the latter, but may adjust if the rates work in such a way that the amount paid into your account yields a higher $ amount (CYA).

durham_lad

Thanks for the update, I also have now updated my spreadsheet

For FBAR, Treasury has also published the Dec 31st rate $1 = £0.812

https://www.fiscal.treasury.gov/fsre...rrentRates.htm

robin1234

Just started to do our 2016 taxes, while listening to the Gorsuch confirmation hearings on the radio. (See if I can still do two things at once...)

So this years rates, as in the above posts,
IRS yearly average - £1 - 1.2987
Treasury year end - £1 - 1.2315

Seems there's a much bigger gap between the two than there was last year ..?

Cook_County

The IRS use a cash rate (ie not an Interbank rate); but it is an average for the whole year. Sterling did not collapse until the end of June.


The Treasury use a November 30 spot Interbank rate; which they pretend is a December 31 rate - so is never going to be similar.

robin1234

Yes, you're right of course. I was forgetting the IRS is an average. Explains why the 2015 rates were much more similar to each other, there hadn't been such a big change during the year.