Sending money abroad from the UK: fees, exchange rates and safety

The cost has two parts. The fee is the charge you can see: a flat amount or a percentage. The exchange-rate margin is built into the rate. The mid-market rate is the midpoint between the prices at which a currency is bought and sold on wholesale markets, and any shortfall between it and the rate you're given is part of what you pay.

Under the Payment Services Regulations 2017, before you're bound by a one-off payment the provider must tell you its charges (with a breakdown where applicable), the actual or reference exchange rate, and the maximum time the payment will take. Use this to work out the figure that matters: how much arrives in the other currency for the pounds you pay. Ask the provider to confirm that amount and whether anything else could be deducted.

To measure a margin, compare the rate you're offered with the mid-market rate at the same moment: margin = (mid-market rate − your rate) ÷ mid-market rate. Rates move all the time, so compare quotes for your amount and destination taken at the same time.

These numbers are made up to show the arithmetic. They aren't real rates or real providers. You want to send £1,000 to someone paid in an imaginary currency called 'units', and the mid-market rate is 50.00 units per £1, so £1,000 is worth 50,000 units.

Quote A has no fee but a rate of 48.50: £1,000 × 48.50 = 48,500 units arrive. That's 1,500 units short, worth £30 (1,500 ÷ 50), a 3% margin. Quote B charges a £5 fee and converts the remaining £995 at 49.75: £995 × 49.75 = 49,501.25 units arrive. That's 498.75 units short, worth £9.98: the £5 fee plus £4.98 of margin. The fee-free quote costs about three times as much.

Every non-bank payment firm must be authorised or registered by the FCA, and working without that is against the law. Non-bank transfer firms are usually electronic money institutions (EMIs), authorised payment institutions (APIs) or small payment institutions (SPIs). SPIs can offer the same services as APIs but have limits on the value of payments they handle; the FCA gives the example of a money remitter that only sends money to one country.

Search the firm on the FCA's Firm Checker or the Financial Services Register. Providers may trade under brand names that aren't listed, so find the legal company name at the bottom of the website or in the terms. Some firms are listed as PSD or EMD agents of another firm (their principal): check with the principal what the agent is allowed to do, because if an agent goes beyond that you may not be covered by the Financial Ombudsman. Make sure the contact details match the register, as clone firms copy genuine ones.

It depends on the type of firm. Money in a UK bank or building society account is covered by the Financial Services Compensation Scheme (FSCS) up to £120,000 per eligible person, per authorised firm, a limit in force since 1 December 2025. Money held by an EMI, API or SPI isn't FSCS-protected. EMIs and APIs must safeguard it instead, in a separate bank account or with insurance or a comparable guarantee. If they fail you should get most of it back, but it can take time and may not be the full amount because the administrator's costs can be deducted. SPIs don't have to safeguard, so ask what protection they offer.

Stronger FCA safeguarding rules for payment and e-money firms took effect on 7 May 2026, including reconciling customer money each business day and keeping a 'resolution pack' to speed up returns if the firm becomes insolvent. Even so, it's sensible to keep only what you need with a non-bank provider. Our FSCS deposit protection guide explains bank cover.

Money transfer firms must follow the Money Laundering Regulations 2017. They must identify and verify you when you open an account with them, and for one-off transfers above £800 (the threshold since 30 June 2026). They must also understand the purpose of the transaction, so they may ask what a payment is for and where the money came from, and they can't go ahead if they can't complete their checks. Have ID ready and, for larger sums, evidence such as payslips or a sale contract.

Each provider sets its own transfer limits, so check its terms. Carrying cash is different: you must declare £10,000 or more to UK customs when travelling between Great Britain and a country outside the UK. In Northern Ireland the threshold is €10,000, for journeys to or from non-EU countries and for arrivals from Great Britain.

Not by the mandatory reimbursement rules. Since 7 October 2024 the Payment Systems Regulator has required payment firms to reimburse most victims of authorised push payment (APP) scams, up to £85,000 per claim, but only for payments between UK accounts over Faster Payments or CHAPS. Its policy statement lists international payments as out of scope, along with payments that pass through other systems, such as money sent to your own account at a crypto exchange and then on to a fraudster. The government plans to merge the regulator into the FCA; the rules still apply.

You can still complain to the provider and, if you're unhappy with its answer, to the Financial Ombudsman Service, which handles complaints about banks, EMIs, APIs and SPIs. Be wary of anyone who tells you to move money to keep it safe, pressures you to act fast, changes the overseas account for a bill or deposit, or is an online contact you've never met asking for money. Contact your provider at once. Outside Scotland, report to Report Fraud on 0300 123 2040; in Scotland, call Police Scotland on 101.

Tax depends on where the money came from, not on moving it: Income Tax and Capital Gains Tax are charged on income and gains. If you're UK resident, you normally pay UK tax on foreign income such as overseas wages, interest, dividends, rent and pensions, reported through Self Assessment. Since 6 April 2025, people in their first 4 years of UK tax residence after at least 10 years abroad can claim the 4-year foreign income and gains regime instead; it replaced the remittance basis.

Gifts of money count for Inheritance Tax. You can give £3,000 a year free of it (plus any unused amount from the previous year), and regular payments from your income that leave you enough to live on, such as support for an elderly relative, are exempt without limit. Gifts to a spouse or civil partner are fully exempt only if they live in the UK permanently. Other gifts may be taxed if you die within 7 years; see our Inheritance Tax guide.

When money reaches your UK account, the bank must credit the full amount as soon as it receives it, unless you've agreed it can deduct charges first, so check your tariff for charges on incoming international payments. Your bank may ask about large or unusual payments as part of its money-laundering checks.