I have just sold my villa in Spain, and want to transfer the profit, in euros, back to my UK account, in sterling. What are my options?

SM, by e-mail

Any proceeds from a sale in Spain are initially processed by a solicitor, who may be legally bound to transfer the funds into a euro account in your own name. So you should make sure you have a bank account in Spain, as having the money sent directly to a British bank can be problematic and costly. Don’t let the solicitor or your own bank exchange the money into sterling for you – the exchange rate used may be poor, and the commission or transfer fees exorbitant.

You should also consider the market in general. Although it has since recovered, the euro hit a four-year low against the pound earlier this year. Currency movements are difficult to predict, but keeping the money in euros gives you the flexibility to choose when to transfer your money and, hopefully, get the best deal. Remember to set up telephone banking before you need to make the transfer. If written authorisation is required, the process may take too long for you to capitalise on a decent exchange rate .

William Collins is a senior dealer at Baydonhill, a foreign-exchange company, www.baydonhill.com

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