You know, one thing that even the most experienced of travellers tends to overlook when planning and preparing for a trip is the issue of repatriation. I know that nobody really wants to entertain the idea of dying on their holidays but sadly, it does happen to thousands of global travellers every year and their families can be left scrambling to find £1000’s to have their body sent home. This is why I personally always advise even young travellers to always make sure they have comprehensive travel insurance that covers any repatriation costs.
The reason I am writing this today is because of the experience of a friend of mine and what I learned from it. We will touch on issues of dying overseas including inheritance tax questions and will also take a look at how to repatriate large sums from abroad.
Death in Paradise
Last year, my friend lost his father who had seen out his days living very happily & peacefully as an expat in Thailand. As the appointed next of kin, my friend was left to deal with all funeral and probate arrangements. Thankfully, he was comfortably able to pay the repatriation costs to have his Father’s body sent home for a full burial. My friend was also assured that he would eventually get his money back from the estate of his Father who had some money put aside for him. However, when trying to recover the monies to cover the costs of probate, as well as get hold of his inheritance, he encountered issues with another kind of repatriation – the repatriation of funds from abroad.
I had never thought about it before that point, but it turns out that receiving an inheritance from overseas can be a pretty complicated affair.
Dealing With Foreign Banks
My friend’s father had most of his money held in a Thai bank account in Thai Baht – afterall, just relying on his old UK bank account for all of his bills and Thailand living costs could have meant him paying hundreds of pounds in fees every month. This is very common for expats living around the world.
Firstly, my friend had to inform his fathers Thai bank that his father had passed away, and serve the relevant documents on them. At this stage, he encountered a language barrier as my friend’s backpacker level Thai vocabulary is fine for ordering beers, but not so good for dealing with banks. Fortunately, his late Fathers Thai partner (eventually…) agreed to help out, and multiple zoom calls later, things were steadily moving. Then after getting the death certificate, probate documents and Will all officially translated into Thai, the bank was ready to deal with my friend and agreed to transfer the funds to a bank of his choosing. This is when things started to get even more complex.
Taxes and Death – Life’s Only 2 Certainties
“And my advice to those who die, declare the pennies on your eyes” – George Harrison
My friend’s father was a “non-domicile” British national living in Thailand. His cash assets had originally been earned in GBP, but were now held in Thailand in Thai Baht. They were being bequeathed to his son living in the UK.
Therefore the first question that arose was who’s inheritance tax laws and regulations would apply – Thailands or the UK’s? My friend took advice on this and was advised that as he was the recipient of the inheritance, he would be taxed in accordance with UK legislation and nothing was payable to the Thai treasury.
My friend’s Father’s property in Thailand however, was being left to his Thai partner. As it is a non-movable asset, staying in Thailand, passing to a Thai national, it will only be dealt with under Thai inheritance rules. So as none of this is my friend’s concern, I will not go any further into it today.
Costs of Transfer
Initially my friend wanted to simply have the Thai bank transfer the monies to his UK bank account. However, he soon changed his mind on this after finding out what the fees would be.
You may already know this, but sending money abroad or receiving money from abroad using the traditional banking system can be seriously costly. This is basically because banks see it as a way to make some easy money. I will explain some more.
If you ever make an international payment through a bank, they apply the least favourable currency exchange rate, and will then also levy a “handling fee” on top of that – this can be a fixed amount, or a percentage.
It gets worse – not only will the sender’s bank levy a fee, but the recipient’s bank will too! There is more, in the event that the monies have to go via an intermediary bank (which happens when Bank A and Bank B do not have a direct relationship) they will also apply a fee. In some cases, an international payment can attract 5 different bank handling fees before it reaches the end recipient and it is not unheard of for a £1000 international payment to have £300 of fees taken from it. A particularly large bank payment could potentially cost the sender a few grand in bank costs.
Receive a Large Payment From Abroad the Smart Way
Once upon a time there wasn’t too much a customer could do about this but these days, the financial marketplace is a lot more competitive and so there are options available.
Money transfer specialists and currency brokers, are dedicated to helping customers and clients move money internationally or make forex transactions. They can help us make large internal payments, send money to family overseas or to repatriate large sum of money from abroad. They typically operate by using a local network of branches that allows them to bypass the banks altogether.
Money transfer specialists generally offer better exchange rates than the banks, and whilst they do charge a fee, these are almost always a lot less than what the banks charge. Perhaps best of all though they are clear and transparent and about how much they are taking and what the recipient will receive. In the end, my friend used a specialist who deals with medium and large international and forex transfers and saved himself a few hundred quid in costs.
When our relatives leave their assets and earthly belongings to us, it is the last grace and kindness they can ever do for us. Unless a relative was exceptionally wealthy, inheritances are usually quite humble amounts of money and are rarely “life changing” sums. As such, the idea of banks helping themselves to a “final fee” can be a bit jarring for many of us. Therefore, if you ever need to repatriate inheritance from abroad, then you should definitely check out a money transfer specialist, repatriation agency or a currency broker to see just what they can do for you.
How To Repatriate Funds From Abroad is a feature post