70k to invest

Save_It_2

I'm just in the final stages of selling my house and will have around 70k to invest. I've decided to rent for at least 6 months or more than likely a year. Whats the best place to invest this money. I want something totally risk free as i intend to go back into the housing market in 12 months time. Also can anyine tell me the tax implications on any interest earned?

whu

if you take out an ISA the interest will be tax free (cash ISA maximum per tax year of £3600 to invest)- if you put it into a savings account you will be deducted 20% at source and if you are a higher rate tax payer you will have to declare the interest on your tax return and pay an extra 20%

Save_It_2

I'm not a higher rate tax payer, is interest added every year?

opinions4u

Different accounts pay interest at different times. Monthly, quarterly, half yearly or annually. You need to check the terms and conditions of the account.

Your tax liability fall in the tax year when the interest is paid.

If interest is paid prior to 5th April 2009, your liability falls in the current tax year. If it's 6th April 2009-5th April 2010 then it falls in the next tax year.

A place for your money could be the Halifax who are paying 7% interest on a fixed rate online account for 6 months. You'd need to review the best option at maturity - moving it to an instant access account perhaps to fit your circumstances. I'd move fast if you want to get the 7% rate as it's not likely to last.

I estimate that you'd receive around £1,926 net of basic rate tax on 22nd April 2009 if you opened the account tomorrow.