What to do with a US dollar gift? (Financial question)

Hi there,
My question is not exclusively related to taxes so pls move if there's a better place...

My parents have given me a generous gift to help my husband and I [try to!] buy a house. (I'm not talking hundreds of thousands of dollars, but a nice little sum that willl help with the down payment.)

We've decided not to do anything with the money for at least 6 months to a year and in the meantime want it to sit and earn interest. We are also aware of the ever-decreasing dollar and are wondering whether or not we should convert it to pounds sooner rather than later.... There are a lot of issues involved here which I'd happily take your opinion on, however I'm also specifically wondering about the following:

1) is there a 'right' way to transfer money from the states to the UK so that you do not have tax penalties or so that you receive a good exchange rate? Currently I have a UK and US citibank account which lets me transfer money really easily, but I'm never sure if I'm getting a particularly good deal - I just use it b/c I'm lazy and it's fast.

2) in terms of earning interest - is the US or UK more competitive? especially if you agree to not touch the money for 6mos to a year?

thanks in advance,
Mimsy2000

on a simple money market account, currently the UK accounts are yeilding higher than the US accounts.  (check out iNG in the states and uk for a comparison).

There are hints for transferring $$ on here as well, do a search!

I don't believe there are hard and fast limits on the amounts to be transferred, however, different banks charge different fees based on the amounts transferred.
I spoke to someone at Intelligent Finance (Internet bank for Halifax so they use Halifax for international transfers) where we have an account and they say that you can transfer unlimited amounts but the fees are tiered based on the amounts sent.
I also have a LloydsTSB account and they will allow you to transfer up to $5000 for a very small fee (something like less than half of 1 percent) but the fee jumps up a bit over that.  Halifax and Lloyds worked different.
I believe you will be taxed on money as long as it sits in your US account.  When you transfer to the UK, the UK bank will take out tax so I think you'll be covered there.

It might be worth contacting different banks to find out what their fees, commissions and exchange rates are like.  Chances are, you'll only be able to transfer to a bank with which you have an account but if you find a particularly attractive rate with low fees you might be able to open an account there and do any ongoing transfers.

Matt

thanks for the info.

i have an account with citibank in  both the us and uk and can really easily transfer between the two - - alledgedly with no charge, but the conversation rate they give me might have padded charges in it. i still need to do a bit more research.

i think i feel a bit of a rush because i keep seeing all sorts of articles/programs saying that the dollar is expected to drop even further.....

cheers

There's certainly no sentiment towards the dollar rising in value.  Although the dollar has moved only within a couple cents up and down against the pound, it could weaken in 2005 if the current account deficit continues to rise or foreign investors go sour on the dollar.  I don't see a short term strengthening of the dollar.

Matt