80K to invest short term - advise please

louise1_3

Ive sold my house and moving into rented accomodation (hopefully temporary) After paying off my mortgage of £97000 I am going to be left with about £80000. Where is the best place to put this,lol? I intened to buy again in the near future so this will be used as a deposit. Can anyone suggest a suitable bank or building society?

Many thanks.

GDB2222

Look here :

http://www.moneysavingexpert.com/banking

rozeepozee

I wonder if it's worth you putting it in an offshore account? Tax interest isn't deducted so you stand to gain more in terms of compound interest. What do other money savers think about this? I've been advised to do this in the past by a financial adviser, but am not really sure if it's the most profitable way to hold money in a deposit account

Ian_W

Divadee's right, I think GDB posted the wrong link to banking rather than savings.

Basically if you haven't used your ISA allowance put £3k [each] in one as the interest is tax-free - there's a link to ISA best buys, if you're going to buy again fairly soon there's a number of online savers suggested in the article. I've got some in the ICICI bank which is the best payer [though it goes down to 5.15% on 1.11], I didn't have a major problem with their admin but others have. All the options are well explained if you don't want to use them.

Never tried offshore, Rozee. I take it you mean as the tax isn't deducted at source interest builds up quicker to earn more interest on, though you're still going to have to declare the interest to the Revenue on your SA tax return? Suppose it depends on what rate you can get offshore as to whether it's worthwhile.

rozeepozee

Yes, Ian, that's what I meant. Thanks for making sense of it. My Sunday hangover has got the better of my ability to articulate today

...and you do have to declare the interest earned once you bring the money back to the UK.

GDB2222

Ian_W wrote:

Divadee's right, I think GDB posted the wrong link to banking rather than savings.

Oops - done in haste. Sorry.

charlieboycat

rozeepozee wrote:

...and you do have to declare the interest earned once you bring the money back to the UK.

Not so - Assuming you are UK resident you have to declare the interest on a self assessment tax return for the tax year in which it is credited to your offshore account, regardless of whether or not you have brought either the interest or the principal back to the UK.

Have a look on https://www.moneysupermarket.com for rates of interest available on offshore accounts - but a quick glance suggests to me that for a short term deposit you can get a better gross rate (eg. 5.25% at Cahoot for 6m with instant access) onshore.

At the end of the day you need to weigh up the cash-flow saving of deferring payment of tax against (a) a better gross rate and (b) ease and quickness of access.

Say you deposited the £80,000 offshore for 12 months at 5% gross. Gross interest = £4,000. Tax deducted therefrom at 20% would be £1,000. What you are saving by going offshore is the cash-flow on this £1,000. Say you defer the tax payment for 12 months. That deferral (at 5% gross) is worth £50 to you before tax. In otherwords, in gross terms you have made £4,050 before tax on your orginal deposit - equivalent to a gross rate of only 5.06%.

IMO not sufficient to warrant the hassle of going offshore.

Lady_E

Just thinking laterally again - how about putting a sum into Premium Bonds for a wee while. I think the upper limit is 50k but I could be wrong , if you got sequential (sp) numbers you never know you might win , and you just give a months notice to get your money back. Dont shoot me , just thinking out loud ....x

Number_6_3

Premium bonds limit is 30k I did really well out of in for a year...however your not guaranteed any winnings. So if you want to make some money, savings is safer even after tax. However you could win more!

angelaphythian

Hi, I am in the same position, I have just sold my house. I have moved in with my partner and will use £80,000 to pay off his mortgage. However he is tied in until 2007.

Does anyone know if I will have to pay income tax on the profits of my house sale?

Kazza242

Lady_E wrote:

Just thinking laterally again - how about putting a sum into Premium Bonds for a wee while. I think the upper limit is 50k but I could be wrong , if you got sequential (sp) numbers you never know you might win , and you just give a months notice to get your money back. Dont shoot me , just thinking out loud ....x

The maximum amount of money that an individual is allowed to invest in premium bonds is £30k.