I've moved from the US to the UK, now what to do with my money?

January 15, 2014 10:11 AM

I've recently moved to the UK, but I still have about $160k in dollars from the sale of a house and savings. I'd like to invest this money, which is currently sitting in a US savings account, but I'm not sure if I should do so in the UK or in the US. I plan to stay here for the long-term (probably will eventually become a citizen).

I'm concerned that by exchanging my dollars for pounds that I will lose a lot of money. No UK banks will tell me their exchange rates over the phone, not even my own bank. I haven't had any luck finding this information online, either. I'm thinking of talking with an independent financial adviser, but I think they are more familiar with how to invest money once it is here, and I want to know if that is worth doing. I'm not sure where to go to get the best information and I'd like to hear what others may have done or who might be able to help me make such a decision. Thanks!

posted by anonymous to Work & Money (8 answers total)

I've lived in continental Europe for about 8 months while having a bank account in the US with most of my money. I used XE Trade to transfer about $2000 at a time about every month. I found their exchange rate and fees to be okay, at least much better than transfers through local banks.

The most important consideration is the fluctuation of the exchange rate between US dollars and pounds. No one knows if this rates will go up or down, but with such a large sum as $160K, even small day-to-day fluctuations can mean thousands of pounds difference. I would try to spread the exchange rate risks by investing your money in the US and only transferring smaller amounts now and then as needed. This also incurs less taxes, I believe (there is a maximum amount you can transfer tax-free - certainly something you'll have to look into). That said, I agree you absolutely need to consult a professional financial adviser, probably a US-based one.
posted by tecg at 10:50 AM on January 15, 2014

Also, even if you believe you are moving to the UK permanently, consider whether any part of this $160K might be used as long-term savings. I believe the mutual fund fees and brokerage account fees are generally much lower in the US than in the UK, particularly for individuals (as opposed to large businesses). Obviously you should do some diligence on this, but if you intend to invest this money long term and could save (say) 1%-2% in fees that are not charged in the US and would be in the UK, that is a pretty substantial savings.
posted by Joey Buttafoucault at 11:04 AM on January 15, 2014

You need professional advice about this. As well as optimising returns you meed to be fully aware of any tax liabilities you might incur by a change in residency, in citizenship, or in transferring the money/assets. Most of the big banks have suitable expertise although there's a lot to be said for independent paid (i.e. not commission) advice as long as the advisor is on the FCA register. Professional bodies such as The Institute of Financial Planners or the Personal Finance Society have high standards, accreditation/chartered membership and useful websites.
posted by cromagnon at 11:29 AM on January 15, 2014

I'd seriously consider using it to buy a property in the UK, if you don't have one already.
posted by prentiz at 2:13 PM on January 15, 2014

Please look into the tax issues associated with assets abroad - both at the UK end and the US end.

Outside some trickily-defined exceptions, the IRS will expect you to file taxes each year if your money is earning money in the US, and not staying current on those obligations may lead to a very nasty surprise if you try to re-enter or even transit through the US at a distant future date.

A tax adviser or accountant can help - look for a UK firm that has a reciprocity agreement with a US firm, and has experience in handling these issues. An initial conversation with them shouldn't cost you anything.
posted by RedOrGreen at 2:41 PM on January 15, 2014

Frankly, if you intend to invest it, you may as well do so in a $ investment account with a US institution. Why go through all the hassle of moving the money to a UK Sterling account if you're only going to turn round and buy a bunch of other assets?

The obvious exception to this is if you intend to buy property in the UK of course, in which case you should use a reputable money broker to handle the exchange - you'll get a *much* better rate from them than you will from your bank.

(And do check out the tax implications whatever you decide, as others have suggested above.)
posted by pharm at 2:50 PM on January 15, 2014

See the HMRC website. You'll need to check it applies to you.
posted by devnull at 11:52 PM on January 15, 2014

Houses in London zone 1 or 2.. you might be able to get something in the East End.
posted by tanktop at 9:03 AM on January 16, 2014