transferring money from UK post Brexit

[alexunterwegs 548]

Is anyone aware about consequences for the transfer of money from the UK to EU countries post Brexit? This is not specifically regarding  pensions etc.(which are discussed under another thread) , but just normal bank transfers. 

I seem to recall in the distant past, the UK Government slapping on a maximum of funds that could be exported from the country, with notes being made in passports to that effect. Could they do it again after Brexit? 

Will this mean that we leave SEPA (the Single European Payment Area)? Will that greatly complicate transfers? Or perhaps more to the point, will leaving SEPA push up the costs of transfers and take longer?   

 

In the draft Brexit Withdrawal Agreement, I note that financial services appear to have been excluded, along with the rest of UK service industries (making up 80% of the economy).

[dj_jay_smith 3,449]

As with almost everything Brexit related, we just don't know yet!

 

The withdrawal agreement basically means that nothing should change during the transition period.  And during this time everything else needs to be negotiated.  

Just because the UK leaves the EU does not mean it has to leave SEPA.  There are non-eu members of SEPA (although they are close EU partners), and there are territories of EU countries which are not part of SEPA.

 

I doubt that the UK would put money transfer limits in place, especially to a level that would affect normal people (unless you are a billionaire of course?), as this would severely restrict business and that is the last thing they would want.

 

Also remember that the UK have adopted the EU withdrawal Act which adopts 20,000 pieces of current EU law into UK law.  So the day after Brexit there will be no difference in the law.

 

Of course it is still not clear if the withdrawal agreement will actually be accepted by the UK MPs (and Spain!), and then who knows.

[fraufruit 42,471]

I don't see why Brexit would effect money transfer vehicles like Transferwise, Forex, etc. With them one can move money from almost everywhere to almost anywhere.

 

I don't see the point of limits either. If your money is sitting in a bank in the UK and you live elsewhere, that money is probably not going to be spent/invested in the UK anyway.

[swimmer 3,707]

The position on SEPA according to main likely Brexit outcomes has been set out for the body that runs it:

 

https://www.europeanpaymentscouncil.eu/sites/default/files/kb/file/2018-05/EPC084-18 EPC Position paper on Brexit v1.0.pdf

 

As the UK's current membership is based on being in the EU, most outcomes it envisages involve the UK naturally having to meet criteria / requirements for participation as other non-EU or EEA states have to.   However, as above, the EU-based membership would naturally be retained during any transition period.  There seem to be be the usual "taking back control" issues around this for the UK - it involves signing up to elements the EU controls as the UK parliament has noted.  (Only one nation is neither EU / EEA or EUR - Swi - so not really used by other states).

 

So basically, another item on the UK's "Brexit to-do" list.  Some action has started - UK law in this area is already being redrafted, also due to other drivers.

[alexunterwegs 548]

Thanks for all of your infos. Not sure I'm alot wiser though. 

Just another topic area that was hardly mentioned by the Brexit lobby,  following their well established philosophy that it will be all right on the night.  

Whilst I haven't any special insight into the finance industry, my gut instinct tells me that coming out of SEPA will certainly not make transfers any cheaper or speedier. Why would you otherwise set up SEPA in the first place if you weren't trying to reduce costs, remove barriers or simplify international transactions?

I presume this would also negatively impact on simple credit card transactions involving currency exchanges also. When you think how often the average tourist uses their credit card when abroad, there may well be lots of unpleasant shocks next time statements arrive on the doormat after Brexit. Again, I can hardly remember this point being mentioned during the Referendum campaign. I appreciate the UK has a different currency, but this is presumably factored into the existing SEPA arrangements. 

 

Good to read comments here that capital export controls unlikely, although I'm sure I read a rumour out there about it somewhere.  

What worries me is that even if we end up with May's negotiated deal, that excludes the services sector which of course includes financial services. 

 

  

[fraufruit 42,471]

57 minutes ago, alexunterwegs said:

Not sure I'm alot wiser though.

 

Nobody knows. We just all like to post.

 

Wouldn't it work both ways, though? If money can't leave the UK, how could it come in?

[alderhill 1,089]

The restrictions on physically moving money out of the country, such as you might see warned about on passports, have to do with fighting money laundering, tax-avoidance or fraud, drugs, the mafia, and other ill-gotten gains. In the old gold/silver standard days, you could understand the danger for a state if too much wealth was physically put outside its control. 

 

If you want, you can still generally take suitcases (plural!) of money out of most Western countries, but you have to declare it with customs and be ready and able to explain and PROVE where it all comes from (they may just hold it for you until you can prove this...). Customs may tax a portion if relevant laws authorize doing so and it hasn't already been done, as is the case for nearly all assets or income. For all the obvious reasons, it's not a good idea.

[fraufruit 42,471]

But 10k us usually OK and not questioned. I don't know what the limit will be in the UK post Brexit.

[dj_jay_smith 3,449]

27 minutes ago, fraufruit said:

But 10k us usually OK and not questioned. I don't know what the limit will be in the UK post Brexit.

 

Good point.  If the pound keeps dropping then they will have to increase the amount  

 

 

And also to say that anything under 10k is not questioned, is not true.  If requested you still need to prove where you got the money from if required as they are still responsible for ensuring that the money is obtained lawfully.  And if you cannot prove this then they have the right to seize the money until you can.

 

I have seen a few TV programs at UK airports where they have questioned people who had less than 10,000 GBP about where the money came from.  In one example it was a business man flying into the UK who had about 8,000 GBP with him to purchase goods.  Then held him for some time while they investigated his story and let him go (he had done this many times and they checked with some of his business contacts).  

In another example it was a young woman leaving the country with about 2,000 GBP (the money was discovered by a money sniffing dog).  She said the money was a gift from her mother for her trip and they again detained her while they checked this.  Although in this case the checks appeared to be light, I think that they were looking for other signs (inconsistent stories, nervousness etc. and of course they don't show everything on TV).

 

[swimmer 3,707]

Passengers on flights arriving from the UK will no longer go through the "Arriving from EU" channel, of course.  That alone is different risk management process.

 

I'm still a cash-based person.   I do get asked sometimes in various places and I so I make sure I specifically take it from a bank and have the receipt with me.   Last (?) customs I exited through (not UK) asked me how much cash I had.   

 

It is right, I think, to assume any additional barriers after Brexit will mainly relate to money laundering and such.    It will also be money entering the EU from a non-EU state, which also has some additional risk.     My property purchase funds were checked by the tax authority soon after it was transacted (not a surprise).  If you brought a large sum, you may expect a check anyway.   Some times my money from the UK is held up incoming for checks and I get asked where it's from and such but eventually it arrives (usually a few k of client business).    And so on. 

[fraufruit 42,471]

I've never been checked, luckily, but I've never been over the limit. I wonder what kind of proof I would have to give if I simply took the cash out of my bank account.

[swimmer 3,707]

It was "er, um, happy to count it..." with the last example I mentioned.   In that specific example, it'd just be sticking to the facts and being honest - transparency goes most of the way.  As the post before mine said, they are looking for patterns of behaviour, or they may at an extreme attempt the second verification (in that case, asking the bank).  Or just confiscate it.  Or, in some places, possibly something unethical like asking for a cut.     

 

For forthcoming trips with some harder authorities, I absolutely have the bank withdrawal records and I make sure I have the money and paperwork to hand (not hidden in my luggage or whatever) ready to indicate I know I may be asked .  

[fraufruit 42,471]

In any event, I bet there is A LOT of money flying out of the UK now and until Brexit given the unknowns.

 

5 minutes ago, swimmer said:

I absolutely have the bank withdrawal records and I make sure I have the money and paperwork to hand (not hidden in my luggage or whatever) ready to indicate I know I may be asked

 

Good idea. 

[swimmer 3,707]

Yes, as that point about the TV shows says, it's hiding it or whatever that tends to draw suspicion.    Not so much just having it.   There's also profiling.  I'm aware that as, a middle-aged woman when on my own, I am seen as low risk at airport borders but very high risk at land ones (drugs, not money).

 

Again, back to that "no deal" checklist, another thing on there is the suggestion to make sure we have sufficent reserves. 

 

Quote

 Prepare financially. The following is particularly relevant to those who derive their income or have savings in the UK in sterling.

• If you have bank accounts, savings or investments in the UK, consider moving them to your host country now. Sterling may drop suddenly in the case of a no-deal exit; there may also be temporary problems moving money in and out of the EU. If most of your savings and income are in the UK, try and make sure you have access to enough cash in euros to see you through two or three months, especially if your income is transferred monthly.

 

[RenegadeFurther 2,394]

22 minutes ago, swimmer said:

 

For forthcoming trips with some harder authorities, I absolutely have the bank withdrawal records and I make sure I have the money and paperwork to hand (not hidden in my luggage or whatever) ready to indicate I know I may be asked .  

 

How do you prove that you have paid Tax on it?

 

I have savings from 2006 in the UK and the Tax authorities in the UK only keep Tax records for roughly 7 years.

[zwiebelfisch 7,067]

24 minutes ago, RenegadeFurther said:

 

How do you prove that you have paid Tax on it?

 

I have savings from 2006 in the UK and the Tax authorities in the UK only keep Tax records for roughly 7 years.

 

Swimmer is talking about cash, I cannot imagine many people are often carrying enough cash to worry the tax authorities.  If you are bringing several tens of thousands in cash then you need to have your story straight but Id expect that's obvious.  There are signs all over most airports in the world (including Germany) saying that you need to declare 10 grand or over and whilst I have never needed to do so, Id expect they ask questions.  If its just the 150 euros in your wallet no-one is going to ask you to prove you paid tax on it.

 

The more common case I think is things like proceeds from selling property, shares etc (normally electronic transfer rather than cash) and those I guess you show your German tax return where of course you remembered to declare them.  

[fraufruit 42,471]

When I used to mule cash over, I kept it below 10k. Now that the transfers are so easy and cheap, I haven't done that in some years.

[swimmer 3,707]

Exactly.   

 

I think my conclusion from the earlier discussion (much as the OP's) is any exit from SEPA at least would logically mean elements may not as smooth as now when transacting between UK and its members, but that is just the logical consequence of the UK deciding it no longer wants a Union's mutuality.    Can't have cake and eat it.    However, that's hardly going to mean one's ability to transact cash between here and the UK grinds to a halt.

 

[Guest]

38 minutes ago, fraufruit said:

When I used to mule cash over, I kept it below 10k. Now that the transfers are so easy and cheap, I haven't done that in some years.

 

Just brought double that in cash plus a larger bankers draft , all declared on leaving UK via HMRC form C9011 and declared at Tegel entering DE.

Questioned in UK and Tegel and presented the paper trail, no problem.

 

Paper trails are your friend.

 

Same principle applies once the UK is a third country