# Opening Sterling Bank Account in Ireland.



## Odea (26 Jul 2017)

I have a largish Sterling Cheque. I don't want to convert this to Euro at the moment because the Sterling rate is poor.
I am thinking of opening a Sterling Account here in Ireland with one of our main banks. It is a holding account with nil interest.
The plan would be to convert all or some of the Sterling back to Euro when the exchange rate improves.
Do I have to notify Revenue or anyone about this or do I just treat it the same as I would an Irish Euro account?


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## Brendan Burgess (26 Jul 2017)

Odea said:


> The plan would be to convert all or some of the Sterling back to Euro when the exchange rate improves.



What if it disimproves? 

Why are you speculating in currencies?  Do you know something that the market doesn't? 

Convert the cheque to euro unless you have the equivalent in sterling expenditure. 

Check out this post

*The best way to transfer large amounts in euro to and from other currencies*


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## Odea (26 Jul 2017)

I don't need Euro. I am of the age where I am beginning to dispose of my UK held shares and exiting the stock market. I am cashing in my chips.  There was a time to buy and there is a time to sell.  Unfortunately I should have started the process sooner when the Sterling/Euro rate was better. The perfect storm was May 2015 when my shares hit an all time high and the Sterling Rate was about .76. I didn't jump ship then and missed the boat.

I have seen Sterling rise and fall over many years and as sure as night follows day, Sterling will improve again.

The majority of my UK shares are back near their all time high. This has happened before and I didn't take my profits then, only to see them fall back, sometimes dramatically. This time I am taking my profits.

Of course this means that in place of pretty good Sterling dividend yields I will now be leaving the funds in an account earning nil interest.


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## Brendan Burgess (26 Jul 2017)

Hi Odea

I have shares in sterling also, so I keep a sterling account in Ulster Bank in Newry.  But I don't have that much cash in it, so I don't worry about deposit rates. 

How do you receive your sterling dividends at present? 

I had a sterling account in AIB Dublin, but it was ridiculously inflexible. That was a few years ago, so things may have changed.

Brendan


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## Gervan (26 Jul 2017)

You can open an account with Ulster Bank NI by post. We sent all documents through Ulster bank internal post, handing them in or having them validated at the local branch in Ireland.
But that is an "off shore account". Nothing illegal about it, but you are required to make a return to Revenue with the details, yes.

Transferwise recently said they now have actual sterling accounts, and I applied for one online just as a test, and got an instant account with dedicated account number, real address. I've not used it yet, and I don't know how that account would deal with cheques.


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## Odea (26 Jul 2017)

My local Ulster Bank branch gave me all the documentation to open the account. Unfortunately the staff did not know much about how the account operates. I know that I cannot do transactions at the counter in my Ulster bank branch. Items appear to be sent by post through their internal postal system. To their head office in Dublin or outside Ireland I could not ascertain.

There is another problem. If I want to transfer an amount of Sterling from my Sterling account to my Euro account I have to give them an instruction. I do not know what rate of exchange I will be given or when the transaction will take place. It seems to be a bit "pot luck". It might take days or longer.

At present I get my UK dividends by post. I like it this way as I can call in to my local branch and lodge them to my account there and then at the counter. I can hold on to the dividend for a while if needs be and keep an eye on the rate of exchange. Maybe this is the wrong way to do things?


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## qwerty5 (26 Jul 2017)

A bit of a tangent. I was listening to Penn Gillette about his recent tour in the UK and how they were getting paid in Sterling. As the rate has plummeted he said they were getting paid a lot less than they thought the were going to get and if they were quoting today the price would be much more.

I'm typing from memory here so this isn't exact.
He said to his manager "why don't we just leave the Sterling in Sterling and wait for it to improve". His manager replied "If you thought Sterling is going to improve why wouldn't you put all of your dollars into it?".

I just thought of it when I saw this thread. If you think Sterling is going to improve why not move your Euros into it. If you think it's going to get worse why not move to a Euro account and move back when it gets lower.


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## Brendan Burgess (26 Jul 2017)

Hi Odea

I have a sterling account in Ulster Bank in Newry.

I get the sterling dividends paid directly there. 
I can pay bills in sterling directly from that account.
When I visit the UK , I can take out cash from an ATM. 

I get occasional cheques in sterling. I post them with a lodgement slip to Newry. 

If I want euro. I transfer sterling to Transferwise and they pay the euro into my euro account in AIB.

However, unlike you,  I am unable to predict how sterling will perform against the euro. 

Brendan


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## Brendan Burgess (26 Jul 2017)

qwerty5 said:


> "If you thought Sterling is going to improve why wouldn't you put all of your dollars into it?".



Brilliant. 

I had no idea who Penn Jillette was so I looked him up.  I found this description which is odd for a currency speculator: 

"He is also known for his advocacy of atheism, scientific skepticism, libertarianism, and free-market capitalism."

Brendan


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## Odea (27 Jul 2017)

Brendan Burgess said:


> However, unlike you, I am unable to predict how sterling will perform against the euro.


I have no intention of "filling my boots" with Sterling, just as I didn't with bank shares. Many people including you, were predicting how bank shares would perform and advising us to fill our boots.

I have a mixed portfolio of investments. About 25% is in Sterling shares. For me that's enough.  I purchased these shares at a rate or circa .80 so when taking my profits I have to factor in that the rate is now circa .89.  I would hope that the rate meets me half way. I think it will.

I reserve an occasional overseas holiday home owned by a British person but that's about the extent of my Sterling purchases so I don't have a great need to have a Sterling account other than a holding account. So the occasional Sterling transfer from my Euro account is not a costly procedure.

Gervan. Do I just tell the Revenue that I have a Sterling account. Will they need details of all my transactions?


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## Brendan Burgess (27 Jul 2017)

Odea said:


> Many people including you, were predicting how bank shares would perform and advising us to fill our boots.



Hi Odea

Feel free to read the full quote  

https://www.askaboutmoney.com/threa...rty-prices-and-borrowing.133122/#post-1009148

Some of my shares have risen. Others have fallen. As with most long-term investors, my gains far outweigh my losses. 



Odea said:


> I purchased these shares at a rate or circa .80 so when taking my profits I have to factor in that the rate is now circa .89. I would hope that the rate meets me half way. I think it will.



I would again stress that you have no way of knowing this.  The market determines what the rate for sterling should be. 


Brendan


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## Gervan (27 Jul 2017)

Odea said:


> Gervan. Do I just tell the Revenue that I have a Sterling account. Will they need details of all my transactions?



Unfortunately it means a full tax return for the year in which the foreign account is opened.
http://www.revenue.ie/en/property/foreign-property/opening-a-foreign-bank-account.aspx

I don't believe Revenue need to be informed of every transaction (I could be wrong, and this may change in future, but I would have thought once Revenue have your bank details, they can ask for a report of all your transactions from the bank). On the Form 11 you are just asked for details of the bank, and the amount lodged at opening.


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## dishwasher (27 Jul 2017)

I opened a sterling bank account in PTSB last year as I sold sterling shares to buy a car in NI (which in imported to ROI).   It's not a foreign account as its in a Dublin branch.  

Was all fairly straightforward. Deposit account, no charges but no interest either.

Only thing is very restricted - could only make withdrawals via bank draft, no online access etc. But served its purpose OK.


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## Odea (28 Jul 2017)

dishwasher said:


> It's not a foreign account as its in a Dublin branch.



Because it is designated in Sterling is it not considered a "foreign" account and is treated the exact same way by the Revenue as if it was outside of Ireland?


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## Early Riser (28 Jul 2017)

Odea said:


> Because it is designated in Sterling is it not considered a "foreign" account and is treated the exact same way by the Revenue as if it was outside of Ireland?



I don't believe so. Assuming that your are opening one of these accounts as an Irish resident, then any interest is subject to DIRT and paid to Revenue in the normal way. There probably is no interest being paid at the moment anyway but there was up to a few years ago. Normal checks would be operated by a bank for opening a sterling account.


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## Laramie (29 Jul 2017)

So an offshore Sterling account...opened in the U.K. has to be returned to the Revenue but a Sterling account, paying nil interest, opened in an Irish bank in Ireland does not?


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## TLO (29 Jul 2017)

Laramie said:


> So an offshore Sterling account...opened in the U.K. has to be returned to the Revenue but a Sterling account, paying nil interest, opened in an Irish bank in Ireland does not?



Correct.  The currency of the account isn't relevant for the purposes of Revenue disclosure.  The location of the account is relevant.


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## Early Riser (29 Jul 2017)

Laramie said:


> *paying nil interes*t



Just to add to TLO clarification, it doesn't matter whether or not interest  is paid as long as the account is subject to DIRT in the normal way.


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## Jim2007 (30 Jul 2017)

Odea said:


> so I don't have a great need to have a Sterling account other than a holding account?



In that case some UK money market products might be an attractive alternative.


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## IsleOfMan (30 Jul 2017)

Back in the day one of the Irish Building Societies stated that they could open non resident accounts for people using U.K. addresses (they had to complete a non resident declaration form) and provided that the interest was paid (it had to be posted or transferred to a separate account) to an Irish resident, it could be paid DIRT free.

So. Is the revenue only interested in these Sterling accounts from a DIRT point of view? A current account does not pay DIRT, is that treated differently to a deposit account that does not pay DIRT?


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## RedOnion (30 Jul 2017)

IsleOfMan said:


> Back in the day one of the Irish Building Societies stated that they could open non resident accounts for people using U.K. addresses (they had to complete a non resident declaration form) and provided that the interest was paid (it had to be posted or transferred to a separate account) to an Irish resident, it could be paid DIRT free.
> 
> So. Is the revenue only interested in these Sterling accounts from a DIRT point of view? A current account does not pay DIRT, is that treated differently to a deposit account that does not pay DIRT?



I'm pretty sure that's the other way around? If the beneficiary of the interest is non-resident, DIRT might not apply - working from memory here.

DIRT is just one reason Revenue are interested in foreign bank accounts. Another is to ensure tax has been paid in the funds lodged into such accounts in the first place. For example where an Irish person might own an investment property in Spain, and have the rent paid to a Spanish bank account.


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## RedOnion (30 Jul 2017)

Odea said:


> At present I get my UK dividends by post. I like it this way as I can call in to my local branch and lodge them to my account there and then at the counter. I can hold on to the dividend for a while if needs be and keep an eye on the rate of exchange. Maybe this is the wrong way to do things?



You're lucky if they're applying the rate immediately. Most banks now send all foreign cheques for collection. That means they apply the rate on the day they receive value for the funds, and usually charge around eur15 for their troubles.


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## Early Riser (30 Jul 2017)

This is my understanding. Correct as necessary.

1 If you have a sterling account in Newry (etc) it is a foreign account, even if your local branch in Wexford facilitates you in some transactions via internal post.

2 If you have a Euro account in Newry it is equally a foreign account.

5 If your local Wexford bank branch assists you in opening an account in its branch in Newry, it is a foreign account.

4 If you have a Euro account in your local Wexford branch (whether or not it pays interest) it is a domestic account.

5 If you have a sterling account in your local Wexford bank branch (whether or not it pays interest) it is a domestic account.

DIRT is payable on the latter two. If you are under the PAYE system this satisfies your responsibilities to Revenue. If you are a chargeable person you file your returns in a normal way.

You need to be able to account for the source of funds in whatever account you have (and pay tax, as appropriate). Foreign funds flowing into an account in any currency may raise extra suspicions.


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## SlugBreath (31 Jul 2017)

Early Riser said:


> You need to be able to account for the source of funds in whatever account you have (and pay tax, as appropriate). Foreign funds flowing into an account in any currency may raise extra suspicions.



If you have a type 5 account from the list above and you don't have to return it to the Revenue why/how would they even be aware of it?


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## Early Riser (31 Jul 2017)

SlugBreath said:


> If you have a type 5 account from the list above and you don't have to return it to the Revenue why/how would they even be aware of it?




They would be as aware of it, or unaware of it, as a type 4 (Euro) account. The Bank would have the same responsibility as regards money laundering or suspicious activity with both.  Euro from Spain  like  Sterling from UK is either dodgy or it isn't. Or someone might want to keep some currency in Sterling for travel, business or other purposes. There is nothing inherently dodgy about it.


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## Odea (10 Dec 2019)

Brendan Burgess said:


> However, unlike you, I am unable to predict how sterling will perform against the euro.


It may have taken awhile but thankfully it worked out fine for me in the end and yes, Brendan, some of us can make predictions based on historic data, trends etc

A bit like your Bitcoin bets I suppose?


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## TrundleAlong (13 Dec 2019)

Odea said:


> I have seen Sterling rise and fall over many years and as sure as night follows day, Sterling will improve again.


Great to see that night continues to follow day...


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