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I will try to be more specific as I expect rules/taxes to be country specific.

I am a French currently living in UK. I have both EUR and GBP account in each country. Because of brexit, GBP has fallen down and I was thinking about taking advantage of it.

My question is: Is it allowed to tranfer 50-100k EUR to my GBP UK bank account, wait few months/years then transfer it back to my EUR french bank account? If so, is it taxable and how?

I would be surprised that currency speculation is allowed without any controls/rules.

As a reminder, UK is still part of EU for now.

Thank you for the replies.

Edit: I am concerned with customs. Importing a quantity of money higher than the one exported will probably have to be justified. I am not sure "currency speculation with profit" would be legal.

Edit 2: Here an example to clarify the situation (Various bank fees won't be included):

  1. Initial situation:
    • EUR French bank account: 100k EUR
    • GBP UK bank account: 0 GBP

  1. 100k EUR are transfered from France to UK

    Temporary situation is:

    • EUR French bank account: 0 EUR
    • GBP UK bank account: 100k EUR

  1. However my UK bank account is in GBP therefore UK bank immediately exchanges EUR to GBP with internal rate

    Situation is now:

    • EUR French bank account: 0 EUR
    • GBP UK bank account: 80k GBP
  1. Fortunately, GBP/EUR rate is increasing and I decide to send all the money in EUR back to France

Temporary situation is:

  • EUR French bank account: 0 EUR
  • GBP UK bank account: 150k EUR
  1. I patiently wait for the conversion + transfer

Final situation is:

  • EUR French bank account: 150k EUR
  • GBP UK bank account: 0 GBP

Conclusion: French customs will see 100k EUR leaving then 150k EUR incoming few months later. My concern is about 50k EUR difference justification. I cannot imagine that France/UK won't try to tax this profit. I hope this example was clearer.

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4
  • Free movement of capital is one of the four pillars of the European Union, so it would in fact be illegal for there to be any restrictions on you moving money between EU countries (and currencies).
    – Mike Scott
    Commented Jul 12, 2016 at 13:05
  • It seems like you're mixing up different things. One is the movement of money between countries. The other is the currency exchange. In principle you could transfer money and maintain the currency or do the exchange without crossing boarders. Are you really concerned with both, or more one than the other? Even with the edit, it seems like you're mixing the two.
    – user32479
    Commented Jul 12, 2016 at 14:21
  • @Brick I am concerned with crossing boarders. Converting the currency is to make profit only. I will add another edit.
    – Flow
    Commented Jul 12, 2016 at 14:57
  • Don't forget to include the fees typically taken by whoever does the currency exchange. That may wipe out any profit by itself.
    – keshlam
    Commented Jul 12, 2016 at 16:10

1 Answer 1

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Depends on the countries and their rules about moving money across the border, but in this case that appears entirely reasonable. Of course it would be a gamble unless you can predict the future values of currency better than most folks; there is no guarantee that the exchange rate will move in any particular direction.

I have no idea whether any tax is due on profit from currency arbitrage.

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3
  • I would assume any loss obviously. I am really surprised to be honest. I'll have to declare the money I send abroad and provide a reason. However I am not sure "currency speculation" is a valid one and the whole process is tax-free. It seems "too easy".
    – Flow
    Commented Jul 12, 2016 at 12:49
  • 1
    It is not likely to be tax-free if you make a profit.
    – Chris W. Rea
    Commented Jul 12, 2016 at 13:05
  • Gambling is never too easy.
    – gerrit
    Commented Oct 19, 2016 at 22:23

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