Transferring money from UK to Spain

Cheaper-than-bank alternatives can save you a bunch

With over 300,000 UK-born expatriates residing in Spain, it is no wonder why it is one of the most popular destinations to transfer money from the UK to. With a significant amount of small business owners among those expats, there are many business transactions from the UK to Spain. With great buy-to-let deals in Spain for Britons, there are plenty of private investors transferring large amounts of money from the UK to Spain. With millions of Brits who have relatives, property, or residance in Spain, there are many small money transfers from the UK to Spain for things that range between birthday presents and monthly mortgage payments.

Generally speaking, there are no restrictions for transfers of money from the UK to Spain. A Spanish resident needs to declare to the Spanish tax authorities whether he received €50,000 in aggregated payments over a course of one year.

Join us on our guide explaining about the top option of transferring money from the UK to Spain.

Here’s how it works in practice... Meet John

John has accumulated some savings in the past few years, and like many other Britons, he decides to invest in property abroad. It will enable him to diversify his investment profile, generate some passive income, and lay the foundation for a genuine overseas holiday home once it has been paid in full. With ultra low interest rates worldwide, and a negative interest rate in Europe, people like John are fully encouraged to make such investments. In fact, in a good buy-to-let deal with gross yields of more than 5%, John will supposedly pay off his entire mortgage from rent. John, like many other Brits, settles for a home in Lanzarote, in the Canary islands of Spain. For £400,000 or less, he buys a fantastic 8 room home with a pool in Tias, Lanzarote.

The only obstacle standing between John and fulfillment of his dream investment, is transferring money overseas, from the UK to Spain, without paying excessive fees that will decrease the pro

Banks – Are They The Best Way To Transfer Money from UK to Spain?

When John speaks to his local high-street banks about the actual fees he will be paying during this transfer, the bank replies with the figure £20 per transfer with no commission. That sounds pretty good for John, but he wants to make sure. So he reads a bit through our FAQ and realises that bank fees go beyond the per-transfer fee – the vast majority of fees are embedded in the exchange rate that is provided to you. Upon contacting his bank again, John fails to fully understand the markup fees he is expected to pay.

“The market is always fluctuating”, they tell him, “we will be able to give you a quote once you want to complete the transaction”.

Upon further investigation, John discovers that his bank quotes him at -2.5% below the inter-bank rate. Although it doesn’t sound like much, it adds up to £10,000 in total in John’s case, a fee that does not seem acceptable for one simple transaction (and is not inclusive of the one-off transfer fees you pay for each cross border payment in the bank).

Additionally to the above, John is concerned with the current happenings and the rapid changes in the Sterling and Euro rate. He is looking to transfer his money from UK to Spain in the most optimal timing available when the Sterling is high and the Euro is low. No one at the bank could assist him with his inquiries. The person handling him have no particular expertise with the foreign exchange markets.

Sending Money to Spain with Commercial Currency Providers

A commercial money transfer provider is a company that is regulated by the FCA to transfer client’s money between different currencies – either between two accounts owned by the client, or to a third-party recipient. They are used mainly by small businesses, expats, and overseas investors and specialise in higher volume transfers.

When John approaches his company of choice, Currencies Direct, which is rated #1 by Money Transfer Comparison, headquartered in London with more than 20 offices in Spain, he is able to very quickly get his account verified online by filling in details. The whole compliance part takes him less than 5 minutes, and within 6 minutes he is already speaking on the phone to a specialist. The specialist is straightforward, approachable, and is able to quote John.

Currencies Direct Offices in London
Currencies Direct’s Offices in London

The rates that Currencies Direct provides to John is way below the 1% mark, saving him 75% of his money with no effort. He can make as many installments as he would like, too, because transferring money is free with Currencies Direct for transfers of any size.

John wants to pursue his options with Currencies Direct’s specialist. He asks about options of locking today’s rate for future transfers and to his surprise he learns that Currencies Direct offers Forward Contracts for up to 24 months for private clients. That mitigates a lot of the technicalities of buying property in Spain: he can make as many payments as he would like, paying today’s rate throughout the period whether the Sterling crashes or trends up, he knows exactly what he is going to pay in Sterling rather than in Euro.

Note – there are a lot of recommended companies which operate in the same fashion. If you’re in John’s situation you may want to sign up with multiple companies and compare current quotes – World First, Moneycorp, Currency Solutions and Global Reach Partners are good places to start your research on UK-Spain transfers.

To Summarise: if you want to find the best way to transfer money from UK to Spain for cheap and with the minimum amount of hassle you should at least consider commercial money transfer providers.

> Go back to our best way to transfer money abroad article

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