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Exchange rate losses: advice needed.

  • 18-11-2008 12:28am
    #1
    Registered Users, Registered Users 2 Posts: 4,099 ✭✭✭


    Hi there,

    Hopefully somebody may have some advice I can pass onto my mother with regards a dilemma she is facing. A number of months ago her brother in Northern Ireland (my uncle) passed away. He left a sizeable sum of money in his will between his siblings, the rest of whom are also in the North as thats where my mother originally hails from. Although the funeral expenses, solicitors fees and the like had to be paid out firstly she knew quite a few months back an approximate figure she would be receiving and received written confirmation today of the exact figure she is to receive, it being 18,750 sterling in the form of a cheque payment. She intended to use this money to do repairs and maintenance to her house as quite a bit badly needs to be done regarding furniture/ new kitchen/ drylining etc.

    However sterling is very weak against the euro at the moment and while she would like to get the use the money as soon as possible presently she will only get approximately 22,000 euro after commission and so on which I think is really poor. Does anyone envisage sterling strengthening against the euro in the near future? Obviously she will have to cash the cheque within 6 months from date of issue. Can she put this money on deposit in a Northern Ireland/ UK bank even though she obviously does not have an address in Northern Ireland, without exchanging it for the moment in the hope the exchange rate will improve/ would this make sense if she could. Any ideas or advice greatly appreciated on this one.


Comments

  • Closed Accounts Posts: 215 ✭✭Ellechim


    Not sure if this is possible,but it might be worth approaching her own bank here and seeing if they would let her open a sterling account. They do it for businesses they may do it for individuals? Then she could wait and see. No-one can realistically predict what will happen with exchange rates.....


  • Registered Users, Registered Users 2 Posts: 4,387 ✭✭✭EKRIUQ


    Its s bit of a guessing game about the currency but the UK government have warned that sterling could go as low as €1=£1.10!

    Just before your mother gets the cheque make sure that all inheritance tax that was due has been paid because nieces are treated differently than siblings or else as soon as the money hits lands in an Irish bank account 20% is due to revenue on top of your loss in exchange rate.

    I know some one in England that sold a house here and will be hit for 40% as soon as then lodge it in an English bank account but for the moment their after gaining about €30,000 by leaving it in an Irish account.


  • Closed Accounts Posts: 456 ✭✭sm.org


    Individuals can open Sterling accounts in Irish banks.

    Regarding the inheritence tax lark is it up to the individual to declare it? The Irish bank would hardly care where it came from at the moment.


  • Registered Users, Registered Users 2 Posts: 1,639 ✭✭✭LightningBolt


    Namesco wrote: »
    Its s bit of a guessing game about the currency but the UK government have warned that sterling could go as low as €1=£1.10!

    Just before your mother gets the cheque make sure that all inheritance tax that was due has been paid because nieces are treated differently than siblings or else as soon as the money hits lands in an Irish bank account 20% is due to revenue on top of your loss in exchange rate.

    I know some one in England that sold a house here and will be hit for 40% as soon as then lodge it in an English bank account but for the moment their after gaining about €30,000 by leaving it in an Irish account.

    It's her brother that passed away so she's within the CAT free limit. Individuals can open sterling accounts, there's been speculation as others have said that the sterling will continue to weaken over the coming months due to various factors. If your mother is near the border perhaps see if you can get a job priced in sterling?


  • Registered Users, Registered Users 2 Posts: 7,541 ✭✭✭Heisenberg.


    This post has been deleted.


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  • Registered Users, Registered Users 2 Posts: 4,099 ✭✭✭johndaman66


    Many thanks to all for the assistance and any is really appreciated. Have a few questions though.

    Namesco do you have any further information regarding this warning from the UK government? That would be a scary thought. Is there a probability it may go the opposite way also as today for example sterling strenghtened against euro somewhat. Not knocking this theory but would like to know more. Perhaps you may have a link?

    Sm.org and LightningBolt Appreciate this advice also. My mother is going to make a call to her bank tomorrow re opening up a sterling bank account to lodge this money into. LightningBolt pricing jobs /materials in the North is not an option unfortunately as she lives in Cork. Thanks for the thought though...

    Could somebody please clarify the rate of inheritance tax she should be paying. To the English/ Irish government?


  • Registered Users, Registered Users 2 Posts: 1,639 ✭✭✭LightningBolt


    We've a double taxation agreement with the UK so she'd only have to pay the inheritance tax once I think to the Irish government at 20% but since the threshold is €50,000 or so your mother won't have to pay anything at all. Open to correction on that. Probably better to have this moved to Accounting, a few tax heads will be better placed to give advice.


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