Send money to Iceland
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Today's best rates to Iceland
As of 24 August 2026, sending £1,000 to Iceland, your recipient gets the most with Revolut: 164,808.08 ISK, the best of 3 providers compared.
| Provider | Rate | Fee | Recipient gets | Speed | |
|---|---|---|---|---|---|
164.81 0.42% worse | £0 | 164,808.08 ISK | Within 2 days | Send | |
165.47 0.02% worse | £20.09 | 162,146.69 ISK | Within 2 days | Send | |
157.79 4.66% worse | £0 | 157,792.55 ISK | Up to 4 days | Send |
For a transfer to Iceland, the cheapest route is almost always a specialist currency company rather than your bank. On a sizeable sum the bank's mark-up on the exchange rate matters far more than any fee — it is usually 1% to 4% of the whole amount, quietly built into the rate. Specialist companies stay much closer to the real mid-market rate, and can even let you fix today's rate for a payment due later. And Iceland uses the IBAN, so paying into a Icelandic account is straightforward.
Iceland feels thoroughly European, so people expect a cheap, instant euro-style payment. It is the opposite.
The krona is its own tiny floating currency, the transfer is a full international FX deal, and the rate itself can move enough between agreeing a price and paying it to outweigh every fee you compare.
How the money reaches Iceland
What account details you need
Iceland uses the IBAN, and it is exactly 26 characters long, beginning with the country code IS followed by two check digits — for example a Landsbankinn account uses the BIC NBIIISRE, an Íslandsbanki one GLITISRE and an Arion banki one ESJAISRE.
The IBAN already contains the four-digit sort code and the account number, so it is the only account detail most transfers need. For the international leg the receiving bank's SWIFT/BIC is added so the money can be routed to the right Icelandic bank.
One point catches people out: Iceland is geographically inside the SEPA area, but SEPA only carries euro payments, so the SEPA scheme cannot be used for a króna transfer — the IBAN is still the correct, expected way to pay into an Icelandic account, just over SWIFT rather than SEPA.
How the money is delivered
Once your pounds are converted, the money is delivered locally inside Iceland. You don't choose the network — the provider does — but here is what is used.
What you actually pay to send money to Iceland
The price of a transfer is not really the upfront fee — it is mostly hidden in the exchange rate. None of it is obvious, so each is worth knowing before you send.
The exchange-rate mark-up
The big one. Banks and some apps quote a rate a little worse than the real mid-market rate and keep the difference — often 1% to 4%. Because it is a slice of the whole amount, it usually dwarfs any upfront fee.
Correspondent-bank fees
An ordinary bank wire can pass through one or two intermediary banks, each able to take a small cut before the money arrives. Specialists using local payment networks usually avoid this entirely.
"No fee" hiding a poor rate
A headline "zero fee" means little if the rate is weak. Judge an offer by the money that actually arrives, not by whether a fee is shown — the comparison above ranks providers exactly that way.
The thin-market spread you cannot see
Because so few krona change hands, the gap between buy and sell prices is naturally wider than on a major currency like the euro or dollar. That spread is baked into the rate you are quoted, on top of any margin, so two firms can show very different krona-landed amounts for the same pounds.
It is invisible on the screen — only the number of krona that actually arrives reveals it.
The 'it's basically euros' pricing trap
Iceland sits inside the SEPA zone and uses IBANs, so it is easy to assume euro-style pricing — a flat fee, no real FX cost. There is no euro leg at all.
You are buying krona over SWIFT, so the exchange margin is the main cost and a correspondent bank can shave a little more off in transit. Judge the deal on krona received, never on the headline fee.
Spot today, or lock the rate with a forward contract?
Spot today, or lock the rate with a forward contract?
The króna is the textbook case for locking a rate, because it is one of the most thinly traded currencies in the developed world — Iceland is the smallest country anywhere (about 390,000 people) to run its own freely floating currency, so its FX market is genuinely small and the rate can move sharply on relatively little flow.
The recent history makes the point: in the 2008 crash the króna lost more than 70% of its value and trading was suspended, and capital controls stayed in place until March 2017. Nothing like that is on the horizon, but it is why a 2–3% move in a few weeks is unremarkable for the króna.
So if you have a property completion or other big payment due weeks or months from now, that ordinary volatility can quietly cost you thousands — on a kr40,000,000 (about £240,000) purchase, a 3% swing is roughly £7,000–£8,000.
A specialist broker can offer a forward contract, which lets you fix today's rate now and pay later (usually with a deposit of around 5–10%), so the cost is locked whatever the market does.
The alternative is a spot deal, where you exchange at the rate on the day you actually send — simplest for money you are moving right now. A forward contract is worth asking about whenever a known króna payment is some way off.
How to avoid fraud when sending money to Iceland
On any large transfer the biggest risk is rarely the exchange rate — it is criminals getting between you and the money. These simple rules are worth knowing before you send.
Completion-day payment-diversion fraud
Rule: This is the single biggest risk on an Icelandic purchase. Criminals hack or spoof the email of your fasteignasali (estate agent), lawyer or developer and send a fake IBAN just before completion, often with a same-day 'the account has changed' message. Before you send a property payment, confirm the full IBAN and the BIC (it should resolve to a real Icelandic bank — NBIIISRE for Landsbankinn, GLITISRE for Íslandsbanki, ESJAISRE for Arion banki) by phone on a number you already had, never one from the email, and treat any last-minute change of account details as fraud until you have re-verified it verbally.
"Better rate" cold-call / clone-firm scam
Rule: Iceland's high cost of living and the króna's swings make 'beat the bank' offers tempting, and a firm that cold-calls you with an unbeatable króna rate may be a clone using a real, regulated company's name and FCA number. Look the firm up yourself on the FCA Register at register.fca.org.uk, then phone it back on the number listed there — not the one you were given — and confirm the people you are dealing with are genuinely that firm.
Off-plan / holiday-home pressure
Rule: Be wary of pressure to rush a deposit on an off-plan flat or a holiday property outside Reykjavík. Confirm the seller, the title and the contract through your own Icelandic lawyer, and check the deed is properly lodged with the district commissioner (sýslumaður) — non-EEA buyers can also need Ministry of Justice consent. Pay only by traceable bank transfer to a verified IBAN, never anything irreversible.
If you are a victim of fraud, report to Action Fraud on 0300 123 2040 or at actionfraud.police.uk (in Scotland, call Police Scotland on 101).
Is money sent to Iceland taxed?
What the rules say
Moving your own money into Iceland — for a property, your pension or savings — is not itself taxed.
The thing people miss is that, unlike Norway or Sweden, Iceland DOES keep an inheritance and gift tax (erfðafjárskattur), charged at a flat 10% on the value above a tax-free threshold of ISK 5,757,759 (about £34,000 at roughly 167 ISK to the pound).
It applies to outright gifts and to 'advance inheritance' as well as estates, so a sizeable gift to an Icelandic resident can fall within it — but a transfer between spouses is fully exempt, and on an advance-inheritance gift no debts may be deducted from the value.
Buying a home carries its own buyer costs that are not a tax on the money you send: stamp duty (stimpilgjald) of 0.8% of the official property valuation (0.4% for a qualifying first-time buyer), a deed-registration fee of roughly 0.1% lodged with the district commissioner (sýslumaður), and an estate-agent (fasteignasali) fee usually of 1.5%–2.4%.
On the UK side, a large transfer triggers a source-of-funds check, which is a compliance step, not a tax. This is general information, not tax advice — confirm your own position with an Icelandic adviser.
Keep your paperwork
On a large transfer the UK firm must run a source-of-funds check — that is a compliance step, not a tax. Keep evidence of where the money came from (a sale statement, pension or investment paperwork, or bank statements) and a big transfer moves through far more smoothly.
When is the best time to send money to Iceland?
For a one-off transfer the rate on the day is what counts — and it moves constantly. The aim is less about guessing the perfect moment and more about removing risk on payments you already know are coming. As a guide, once the money is sent an Icelandic króna transfer is settled internationally over SWIFT, so it typically lands within one to a few working days once the firm has actually sent it. Inside Iceland the money moves fast — the Central Bank of Iceland's EXP instant scheme (live since 2020, built by SIA/Nexi and hosted by Reiknistofa bankanna) clears domestic króna payments in under a second — but that scheme only works between Icelandic accounts, so your cross-border leg still rides SWIFT and arrives at international-wire speed, not instantly. On a large sum the real wait is almost never the rail: it is the firm's source-of-funds checks before the money leaves the UK. Iceland sits inside the SEPA area geographically, but SEPA only carries euro payments, so a króna (ISK) transfer cannot use SEPA at all — a recurring source of confusion with Iceland.
The krona is thin and tourism-driven. Foreign currency floods in over the summer travel peak (roughly June to August) and dries up in winter, and fish and aluminium export earnings move it too — so the krona often firms in the high season and softens off-peak.
With so few krona traded, a single large flow can nudge the rate, and a 2-3% move in a few weeks is unremarkable. There is no 'good season' to bank on; for a known payment, the swing itself is the risk, which is why locking a rate matters more here than the calendar.
Lock the rate for a known date. If a payment is weeks away, many specialists let you fix today's rate now (a forward contract), so a sudden market move can't blow a hole in your budget before the money is due.
Set a target with a rate alert. For flexible transfers, you can set the rate you want and be notified (or trade automatically) when the market reaches it — useful when you have time on your side and no fixed deadline.
The costliest mistakes when sending to Iceland
A handful of avoidable slips account for most of the money people lose. Each is easy to sidestep once you know to look.
Defaulting to your bank without comparing. The bank's rate mark-up usually costs far more than any fee, and it is easy to miss because it is built into the rate rather than shown separately.
Judging by the fee, not the amount delivered. A "no fee" offer can still be the worst deal if the rate is poor. Always compare on what actually arrives.
Mistyping the account number (IBAN). If the account details are wrong the transfer can bounce back after a delay, or reach the wrong account. Always check them against details your recipient sent in writing.
Trusting bank details that arrived by email. Payment-diversion fraud is a real risk — always confirm the receiving account by phone on a trusted number first.
Using an unregulated or cold-calling firm. Check the company on the FCA Register before you move any money, and never act on an out-of-the-blue offer.
Treating it like a euro transfer. Iceland is in SEPA and uses an IBAN, so it feels like a cheap euro payment. It is not — SEPA only carries euros, the krona rides SWIFT, and you pay a full FX margin. Budgeting for euro-style speed and cost leaves you short and surprised by the timing.
Leaving a big krona sum unhedged. On a property completion or relocation due weeks off, holding out for a better rate on the krona is a gamble on one of the world's most volatile small currencies. An ordinary 2-3% swing on a large sum is thousands of pounds either way. A forward contract removes that guesswork by fixing the rate now.
How do most people send money to Iceland?
For most expats and larger transfers, the simplest and cheapest route is a specialist currency company paying into the recipient's bank account (paid to the recipient's Icelandic IBAN over SWIFT; once it reaches an Icelandic bank it can be passed on domestically over the EXP instant scheme in seconds). For a known future payment, fixing the rate with a forward contract is what sets the specialists apart from a bank. Whichever you choose, judge it by the money that actually arrives — and confirm the receiving account before you send.
Frequently asked questions about sending money to Iceland
Yes. Iceland uses the IBAN, and an Icelandic one is exactly 26 characters: the country code IS, two check digits, then the bank, sort-code and account number.
It already carries everything the receiving bank needs, so it is usually the only account detail you supply. For the cross-border step the firm also adds the receiving bank's SWIFT/BIC — NBIIISRE for Landsbankinn, GLITISRE for Íslandsbanki, ESJAISRE for Arion banki, for example.
So a form asking for an IBAN is exactly right; just type all 26 characters carefully, because a single wrong digit can bounce the payment back after a delay.
Almost always a specialist currency company rather than your high-street bank.
On a large transfer the bank's mark-up on the exchange rate — often 1% to 4% — matters far more than any flat fee, because it is a slice of the whole amount: at a live rate near 1 GBP = 167 ISK, a 3% margin on a £2,000 transfer quietly costs you about ISK 10,000, and on a £250,000 relocation the gap can be several thousand pounds.
Because the króna trades thinly, that margin can be wider than on a major currency, and a plain bank wire over SWIFT can also lose a little to correspondent banks on the way.
Judge providers on the number of krónur that actually land in the Icelandic account, using the live comparison above, not on whether a fee is shown.
A forward contract lets you fix today's exchange rate now and settle later, usually for a deposit of around 5–10% up front with the balance paid on or before an agreed date.
It is most useful when you have a known payment some way off — a property completion in a few months, say — because it removes the risk of the rate moving against you in the meantime.
With the króna that risk is real: it is the smallest freely floating currency in the developed world, trades thinly, and a 2–3% move in a few weeks is unremarkable, so on a kr40,000,000 (about £240,000) home that is roughly £7,000–£8,000 swinging either way.
If you are moving money right now, a plain spot deal is simpler; if a big króna payment is weeks or months off, ask a broker about a forward.
No — and this trips a lot of people up. Iceland is actually inside the SEPA area, and it uses the IBAN, so you would reasonably expect a SEPA transfer to work.
But SEPA only ever carries euro payments, and Iceland's currency is the króna, not the euro, so a króna transfer cannot use SEPA at all. It is settled internationally over SWIFT instead, which is why the timing and costs look like an international wire rather than an instant euro payment.
Domestically the króna does have an instant scheme — the Central Bank of Iceland's EXP system clears payments between Icelandic accounts in under a second — and the króna is due to join the Eurosystem's TIPS instant-payment platform in 2028, but for now an inbound ISK transfer from the UK typically lands within one to a few working days.
Reputable ones are authorised and supervised.
The firm sending your money sits under UK rules — the Financial Conduct Authority (FCA) regulates money-transfer firms here and requires them to safeguard customer money by keeping it separate from their own — while the Icelandic bank receiving it is supervised by the Central Bank of Iceland (Seðlabanki Íslands).
Check any UK firm yourself on the FCA Register at register.fca.org.uk before you send a penny, be wary of cold calls and clone firms using a real company's name, and confirm you are dealing with the genuine, listed business by calling the number on the register rather than one you were given.
Possibly — and this is where Iceland differs from Norway and Sweden, which abolished these taxes. Iceland still levies an inheritance and gift tax (erfðafjárskattur) at a flat 10% on the value above a tax-free threshold of ISK 5,757,759 (around £34,000 at roughly 167 ISK to the pound).
It catches outright gifts and "advance inheritance", not just estates, so a sizeable gift to an Icelandic resident can fall within it — but a gift between spouses is fully exempt. Moving your own money into Iceland is not itself taxed.
On the UK side you may still face a source-of-funds check. This is general information, not tax advice — check with an Icelandic adviser or Skatturinn, the Iceland tax authority.
An Icelandic króna transfer from the UK is settled internationally over SWIFT, so once the firm has actually sent it the money typically lands within one to a few working days.
Don't be misled by Iceland's fast domestic rails: the Central Bank of Iceland's EXP scheme clears payments between Icelandic accounts in under a second, but that only applies once the money is already inside Iceland — your cross-border leg still moves at international-wire speed.
On large sums the slowest part is usually the source-of-funds checks before the money leaves the UK, not the payment rail, so having your paperwork ready is what keeps a big transfer on schedule.
Our sources & how we keep this current
Last updated: June 2026. The live rates above refresh automatically, and we review the rest of this guide every month — updating it whenever the rules on payments, tax or regulation change.