Savings advice needed please

Alex1234

Hi, just needed some advice on the R85... see I am a full time mum, not currently working (home studying ready to work when my little boy starts preschool in a year or so), my husband works full time for himself. We are just selling our property and have decided to take our money and put it in either a 6 month fixed term or 6 month bond before we buy again, we will then open a separate regular savings account and hope to save about £1600 per month min for the next 6 months too (we haven't yet opened an isa each so will do that first and use our ISA allowance before the regular savings). Now because I am not earning if the savings are in my name do I qualify for the R85 on the 6 month savings and reg savings? If so, (sorry to be naive) how does it work? What will I need to do? Any advice greatly appreciated.
Oh and sorry the amount we will be investing for 6 months will be £75k approx.

Thanks

simpywimpy

If you are a none tax payer, the money would be much better being under your name. You just fill in a form and take it back to where you have the account, not the tax office.

Kaupthing edge internet accounts were offering 7%

opinions4u

Alex1234 wrote: »

Hi, just needed some advice on the R85... see I am a full time mum, not currently working (home studying ready to work when my little boy starts preschool in a year or so), my husband works full time for himself. We are just selling our property and have decided to take our money and put it in either a 6 month fixed term or 6 month bond before we buy again, we will then open a separate regular savings account and hope to save about £1600 per month min for the next 6 months too (we haven't yet opened an isa each so will do that first and use our ISA allowance before the regular savings). Now because I am not earning if the savings are in my name do I qualify for the R85 on the 6 month savings and reg savings? If so, (sorry to be naive) how does it work? What will I need to do? Any advice greatly appreciated.
Oh and sorry the amount we will be investing for 6 months will be £75k approx.

Thanks

Let's assume you invest £75k in your name for the 8 months remaining this tax year and get a 7% rate and have no other income within the tax year.

If that is the case, then sign the R85 and have no guilt - the money is yours.

If you still have the investment in to the next tax year, and get a part time job, then you do have to review things then.

Equally, if you start earning before 5th April 2009 you should review the situation too. You don't want to put yourself in a position where you take your interest, spend it, and then get a retrospective tax bill on it!

Jonbvn

Open a Kaupthing Edge instant access account in your (non-taxpayer) name. Send them your R85, then open their 6 month fixed term account current paying 6.85% gross (6.97% AER)

Alex1234

Thank you for your advice all, that's great yes Opinions4u the plan is to have a house bought before the new tax year (fingers crossed) and don't plan to start working until we've moved, so that's great, no tax and guilt free with it! Not very often one can say that! So just one thing with the R85 once sent off does that mean they automatically don't take off the tax or do I have to claim somewhere to get my tax back?

Alex1234

Thank you for your advice all, that's great yes Opinions4u the plan is to have a house bought before the new tax year (fingers crossed) and don't plan to start working until we've moved, so that's great, no tax and guilt free with it! :beer: Not very often one can say that! So just one thing with the R85 once sent off does that mean they automatically don't take off the tax or do I have to claim somewhere to get my tax back? Just want to all my homework so I don't make any costly mistakes.

opinions4u

Alex1234 wrote: »

Thank you for your advice all, that's great yes Opinions4u the plan is to have a house bought before the new tax year (fingers crossed) and don't plan to start working until we've moved, so that's great, no tax and guilt free with it! :beer: Not very often one can say that! So just one thing with the R85 once sent off does that mean they automatically don't take off the tax or do I have to claim somewhere to get my tax back? Just want to all my homework so I don't make any costly mistakes.

Completing the R85 within this tax year means all your interest should be paid gross (no tax deducted). You will need to remember to "unregister" when you become a taxpayer again though.

Sounds like you need an easy access account for this money (don't tie it up for 6 months because you could be struggling if you find the right house early) - 6.52% at Birmingham Midshires, 6.4% at IF.com or 6.3% at Egg worth looking at, among other online accounts.

Mikeyorks

With a number of accounts you don't complete an R85 .... as an increasing number of Institutions are 'paperless' in this respect. If they provide the option, you just specify 'gross' when opening the account. And they will write to you 'in R85 terms' to tell you what you have signed up to.

PeterSBK

You should take a look at high yield savings accounts, they’re online and very easy to use and manage. ShoreBank, the bank I work with, offers 3.50% APY on all new accounts and we’ve been around for over 35 years. You can save for your family’s future but the funds are liquid so they are easily accessible. Check out http://shorebankdirect.sbk.com.

opinions4u

Something I forgot to include - if you are likely to return to work next tax year, you may become a tax payer again then.

If this is the case, ideally you want to have your interest paid before (but as close as possible) to 5th April 2009 to ensure you receive your entitlement to 'no tax deduction'. Closing the account will normally achieve this, or asking the bank to capitalise the account is another option - some will (although the staff may not know this!) and some won't.

If the interest is paid on or after 6th April. you then return to work in September and earn enough to pay tax (£6,035 including interest - I think) between 6th April 2009 and 5th April 2010 you will have to pay tax on the interest too.