Transferring Money to Australia

You want to send money to Australia, and fortunately you live in the modern age, where it’s as easy as pie. We’re a long way from sticking a cheque in an envelope, and even further from entrusting someone with a horse and carriage to safely deliver your gold coins.

Transferring money today is a much simpler business, but there are still longer, more expensive options, and quicker, more affordable ones.

On this page, we’ll guide you through everything you need to know about sending money from the UK to Australia, including typical costs, useful tips, and the best ways to do it.

What’s on this page?

01 | How to transfer money to Australia
02 | How much does it cost?
03 | How long does it take?
04 | How much can you transfer?
05 | What are the tax implications?
06 | What keeps my money safe?
07 | What next?

How to transfer money to Australia

To send cash on its way to someone’s Australian bank account, you don’t need to use the services of a bank. It’s only one of your options. 

These days, there are usually three options to choose from: banks, P2P (peer-to-peer) currency exchange platforms, and foreign exchange brokers.

Allow us to take you through each one.

Transferring money with a bank

This is the traditional option. You can send an international wire transfer from one bank to another through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network.

The SWIFT network comprises more than 10,000 banks in 200+ countries, so it’s certainly wide-ranging.

However, it’s also an expensive choice. There are usually several fees associated with SWIFT transfers, such as those charged by the sender and recipient banks, along with any charged by the intermediary banks.

Unless the sender and recipient banks have a strong relationship with one another, there can be up to three intermediary banks involved – which is a lot.

After all, banks typically apply a mark-up to the exchange rate, which is usually around 4-6% above the mid-market rate (the one you see on Google). 

There’s more info on fees further down the page.

Transferring money with a P2P currency exchange platform

In the past decade, the arrival of internet-based peer-to-peer foreign currency exchange platforms has radically changed the market. 

These platforms are generally much cheaper than the service offered by banks, mainly because they use the real, mid-market exchange rate, and charge very low fees.

In 2019, The Daily Telegraph reported that the exchange rates used by P2P platforms were on average 4% cheaper than those used by banks.

Importantly, these companies also offer a strong level of security. Every responsible P2P platform operating in the UK is authorised and regulated by the Financial Conduct Authority (FCA). 

These services are called “peer to peer” because they match you with someone else around the world.

For example, if you’re looking to send £100 to Australia, a company like Wise (formerly TransferWise) will find someone who wants to transfer AUD$180 to the UK, and use this pairing to fulfil the exchange.

If they can’t find anyone to match your transfer request, P2P platforms will simply buy the currency from the usual interbank markets – although this can then make the transfer more expensive. 

That’s why exchanges in very common currency (e.g. dollars, pounds, euros, and yen) are very cheap on P2P platforms, because there’s always demand on both sides. Users literally trade between themselves without any dealers getting involved.

Transferring money with a foreign exchange broker

Foreign exchange (FX) brokers are useful if you’re sending very large sums of money abroad, i.e. over £3,000. They charge fees for their services, but will typically waive (or reduce) these fees for larger transfers.

FX brokers also add a mark-up to the exchange rate, but this is typically much smaller than the mark-up usually applied by banks. 

The key benefit of using an FX broker is the ability to set up a forward contract. This means you can set up future international money transfers with today’s exchange rate, so you won’t be affected by any negative changes.

What is the best way to transfer money to Australia?

That depends on how much you’re sending, when you need it to arrive by, and how much you’re willing to pay in fees. 

It’s ultimately up to you, and we absolutely recommend you talk to a qualified tax professional before you make a decision.

However, for an easy-to-use service that’s quick and good value for money, look no further than Wise (formerly TransferWise).

How much does it cost to send money to Australia?

It depends on what service you’re using, how much money you’re transferring, and how you’re paying for it.

If you use banks to send an international wire transfer, you’ll be dealing with a marked up exchange rate and a sending fee, while your recipient will have to pay a receiving fee.

According to research by Finder in May 2020, you can expect UK banks to charge up to £40 as a sending fee for an international money transfer, and up to £7.50 as a receiving fee.

Meanwhile, on average, banks add a 4% mark-up to the mid-market exchange rate.

In contrast, P2P currency exchange platform Wise’s fees for sending pounds to Australia currently range from a 0.4% fee on transfers of £1,000, to a 0.28% fee on transfers of £633,550 or more.

It also depends on how you pay for the transfer. For example, using a business debit card to transfer pounds with Wise incurs a 0.69% fee, while a credit card incurs a 2.45% fee.

Find out today how much it’ll cost you to use Wise.

The cheapest way to transfer money to Australia

In most cases, you’ll find the best rate with P2P foreign currency exchange firms, as they don’t tend to apply any mark-up to the mid-market rate. 

For example, depending on the variables, Wise’s service can be up to 8x cheaper than the service offered by high street banks. 

However, if you plan to send large amounts of money to Australia at regular intervals, a forward contract with an FX broker will probably offer you the best value.

How long does it take to transfer money to Australia?

Again, there’s a bunch of variables at play which can affect the length of time it takes to send pounds to Australia. These include:

• The service you’re using 
• The number of banks involved (SWIFT transfers can involve up to three intermediary banks)
• Whether the transfer falls on a weekend or public holiday

In general, the standard length of time for any international money transfer is between 0-5 business days, with banks generally taking longer than P2P platforms.

For example, if you send money to Australia through NatWest, a standard transfer will take 2-4 working days.

Or if you choose to transfer money to Australia with HSBC, it’ll “normally take up to four working days”.

In contrast, sending money abroad via P2P exchange platforms like Wise is typically much quicker. For example, if you send £10,000 from the UK to Australia via Wise, it’ll usually be in your recipient’s account by the next day.

And if you change your Wise payment method from a wire transfer to a debit card, you can cut down the time it takes even further.

It rarely if ever takes as long as an international wire transfer, because there are no intermediary banks involved.

How much money can you transfer to Australia?

When it comes to maximum and minimum limits, there’s usually a bit of a trade-off between banks and P2P platforms.

Generally speaking, you pay higher fees to send cash via banks, but you can send larger amounts of cash; meanwhile P2P platforms keep fees low, but also impose smaller limits on how much you can send.

For example, Wise allows transfers of no more than £10,000 per day (if paying via debit or credit card), whereas HSBC allows you to send up to £50,000 online, and as much as you want from a branch.

However, if you’re not looking to send vast sums of money abroad, P2P foreign exchange firms also come with very favourable rules for minimum payments.

Wise simply requires you to transfer at least AUD$0.01, while services such as Western Union require a minimum payment of just £1.

While some banks also do not impose a minimum limit on payments, their large flat fees can make small transfers rather uneconomical.

What are the tax implications of transferring money to Australia?

Please be advised that while every effort is made to keep this information up to date, Movehub does not provide tax advice, and you should always consult a tax professional about your unique circumstances.

Tax implications for the sender in the UK

Dan Allen, senior press officer at HMRC, said that “there wouldn’t be any tax from the UK on transferring money to Australia – although any Australian tax would be a matter for them.”

However, before sending any money internationally, it’s important that you consult with a professional accountant and/or HMRC to ensure that you’re acting in full compliance with regulations.

Tax implications for the sender in Australia

The below information is sourced from a conversation with tax expert Joanne Lamberth, who is the Sydney director for UK tax firm Websters.

“AUSTRAC (Australian Transaction Reports and Analysis Centre, a government agency created to stop criminal abuse of the financial system) can, and does in our experience, monitor any amount of money transferred over AUD$1,000.

“If the money is completely independent, like a transfer from a father to a son, there shouldn’t be any tax implications – but that isn’t always true.

“We tend to advise people that if it’s a family gift, they send a written letter that comes in conjunction with the gift, that says: ‘I’m sending money to my son’, and explains that it’s a gift and he’s free to do with it what he wants.

“Any genuine gift, whether between family members or not, is tax exempt. Family gifts are just the easiest to explain, because they’re very common.

“If it’s an individual sending money to themselves, any foreign currency you hold yourself once you’re an Australian citizen can be subject to Australian tax.

“If the funds are coming from an account set up before July 1st 2003, those are capital gains accounts, while accounts set up after that are Forex accounts.

“If you have any post-July 1st 2003 accounts, any movements on those accounts – whether it’s £10 in or out – every transaction going in and out from the date you become an Australian citizen, you’ll have to calculate a Forex gain or loss on.”

Are there any exceptions?

“But there are two exceptions. One is a limited balance account election, which allows you to select any transactional foreign account or accounts you have, provided the total balances are and remain less than AUD$250,000, to be exempted”, explained Lamberth.

“Then there’s another election that allows you to simplify how you calculate the Forex gains and losses on your transactions, by taking a financial year and averaging all the movements.

“That can work against you, because it can make you pay tax on a currency gain you didn’t realise, but it’s a lot easier than having to calculate every Forex gain or loss.”

Lamberth advised our readers to “make sure there’s a clear line of evidence of why you’re sending the money.”

AUSTRAC had previously only tracked transactions of AUD$10,000 or more, but Lamberth said this had changed recently.

“AUSTRAC can monitor anything over AUD$1,000, we think. We’ve had multiple incidents of that happening, so we believe they’re regularly checking below AUD$10,000,” she explained.

“It’s probably only been in the last two or three years that they’ve been tracking those smaller amounts.

“We had a big royal banking commission that happened 18 months ago, and that commission found there were big flaws in the banks’ money laundering tracking process, and I think that’s why AUSTRAC has upped its game.”

In terms of general advice, Lamberth said: “If you’re moving and you have accounts in the UK, it’s best to take advice before moving money to Australia, because it can be quite punishing, the amount of work you have to do to prove things. It’s quite different from UK legislation.

And she had a warning for any prospective money launderers.

“The level of data mining software the Australian government uses, to me having worked both in the UK and Australia, is a lot more sophisticated than that used in the UK, and picks up things at a much higher level of detail”, said Lamberth.

Before sending any money from the UK to Australia, we strongly advise that you consult the services of a qualified tax professional, to ensure that you are acting in full compliance with UK and Australian law.

What keeps my money safe when I send it to Australia?

There are governing bodies in the UK and Australia whose job it is to ensure that every bank and P2P currency exchange platform is operating responsibly, so that every customer’s money is protected.

Money transfer safety measures in the UK

All P2P currency exchange firms with registered offices in the UK are administered by HMRC, so they’re obliged to follow all UK Money Laundering Regulations. 

Plus, as ‘payment institutions’, all money transfer firms are monitored by the Financial Conduct Authority. Before sending your money with any currency exchange company, you should check to see if they’re on the FCA register.

Money transfer safety measures in Australia

Any foreign money transfers over AUD$10,000 (£5,530) must be declared to AUSTRAC, which monitors and gathers data on all these transfers.

However, companies which specialise in money transfers can also be compelled to report any transfers over AUD$1,000 (£553), or any transfer it deems suspicious.

Check with the company you’re using, as it may know whether your transaction will have to be reported.

What bank details are needed to send money to Australia?

You’ll need banking details, as well as a few other pieces of information, to carry out a money transfer from the UK to Australia. Here they are:

• Your name, contact information, and banking details, including your account number
• The recipient’s name, address, and the account type they have with their bank (e.g current or savings)
• The recipient’s account number or IBAN (International Bank Account Number)
• The name and address of the recipient’s bank.
• The recipient’s bank’s BIC/SWIFT code.

What next?

You should now be much more knowledgeable about how to transfer money from the UK to Australia. As you can see, there are multiple options available to you, and they each come with their own benefits.

If you’re tempted by a P2P foreign currency exchange platform, look no further than Wise.