A British holidaymaker identified as F.C. selling an 18 million Turkish lira home in Turkey has been advised to consult specialist foreign exchange brokers to avoid high banking fees.
The property sale is scheduled to complete at the end of October, concluding 20 years of ownership of the holiday home. F.C. holds a Turkish bank account but does not possess Turkish residency status.
Under Turkish law, real estate transactions must be executed in Turkish lira, requiring the seller to convert the proceeds into British pounds before transferring the funds to a UK bank account.
Based on prevailing exchange rates, a currency converter indicates that 18 million lira is worth approximately £275,000. However, exchange rates fluctuate continuously, introducing financial risk to the transfer.
F.C. initially explored using Turkish banking services, but found that the bank imposed high charges for foreign currency conversions and international transfers.
The seller also investigated Wise, a UK-headquartered international money transfer fintech known for transparent fees. Wise quoted a total fee of 0.42 per cent, including a discount for transferring a large sum.
F.C. conducted a small test exchange through Wise, but discovered that the service enforces a maximum limit on the amount of Turkish lira that can be transferred in a single transaction.
Attempts by the owner to use another currency exchange service failed because the provider could not send Turkish lira directly to a UK bank account.
Hidden costs in traditional bank transfers
Financial journalist Sam Bromley, of consumer news outlet This is Money, referred the case to Nathan Prior, partner and head of international at Partners Wealth Management, a UK wealth management firm specializing in multi-jurisdictional financial planning.
Nathan Prior warned that traditional bank transfers often carry far higher conversion costs than consumers anticipate when moving funds between foreign accounts.
Prior explained: "Whenever moving funds between bank accounts with different currencies, you should be aware that the cost of converting another currency (such as the Turkish lira) into pounds is often higher than many people realise when using a standard bank transfer."
He noted that banks frequently hide costs within the exchange rate margin rather than presenting them as upfront transfer fees or commission charges.
Prior said: "Banks may offer a rate that is less favourable than the prevailing market rate, and the difference between the two is known as the exchange rate margin. On a transaction of around 18million Turkish lira, even a relatively small margin can result in a significant cost."
An exchange rate margin, or spread, reflects the difference between the wholesale interbank rate and the retail rate offered to customers, allowing institutions to capture profit on currency conversions.
Comparing specialist foreign exchange providers
For high-value transactions, Prior recommended consulting specialist foreign exchange brokers rather than relying exclusively on Turkish or UK retail banks.
Prior stated: "For larger transfers like this, I would suggest speaking to a specialist foreign exchange provider, rather than relying solely on your Turkish or UK bank. Companies that specialise in international currency exchange often offer more competitive exchange rates, net of costs."
He urged sellers to evaluate the final sterling amount received rather than relying solely on advertised fees.
Prior advised: "Try to compare the actual pounds that you will receive at the end of the exchange rather than the quoted fees, as that will give you a better picture of the net result. Even with small marginal cost differences, on a larger sum like this the savings can be meaningful and very much worth checking a couple of options."
Regarding Wise, Prior acknowledged that the platform is worth investigating due to its competitive pricing and fee transparency relative to traditional lenders.
However, Prior added: "When dealing with a transfer of this size, it would be sensible to compare Wise's overall costs against those offered by a few specialist foreign exchange providers before deciding. Again the best option is not always the one with the lowest advertised fee, so comparing the final sterling amount you would receive is usually the best approach."
Managing exchange rate volatility and timing
Beyond comparing exchange margins, specialist FX providers can assist sellers in managing currency market volatility and timing risks.
Turkey has experienced significant currency volatility, making the timing of converting large sums of lira into foreign currencies critical for property sellers.
Prior explained: "Depending on your circumstances and appetite for exchange rate risk, they may discuss whether it makes sense to convert the full amount at once or transfer it in stages over a period of time. While no one can predict currency movements with certainty, having access to specialist support can help you make a more informed decision."
A staged transfer strategy enables sellers to average out exchange rate fluctuations over time, mitigating the risk of converting the entire sum at an disadvantageous rate.
Tax implications in Turkey and the UK
In addition to currency conversion strategy, Prior emphasized that property sellers must address complex tax liabilities in both jurisdictions before moving funds.
Prior said: "Separate from the currency transfer itself, I would strongly encourage you to consider the tax implications of the property sale. There may be capital gains tax, reporting requirements, or other obligations in Turkey, and there could also be UK tax considerations depending on your personal circumstances, residency status and any reliefs available."
Capital gains tax on overseas property sales depends on ownership duration, residency status, and tax treaties between the UK and foreign governments designed to prevent double taxation.
Prior noted: "Given the value involved, obtaining advice from a tax professional would be advisable. This can help ensure any declarations are made correctly, reliefs are claimed where available, and there are no unexpected issues once the sale proceeds have been transferred to the UK."
Prior outlined a three-step checklist for the seller before traveling to Turkey for completion: obtaining quotes from multiple FX specialists, comparing those quotes against Wise and Turkish bank rates, and securing professional tax advice regarding the sale.
