How to save £25000 available mid Feb for taxbill 31Jan2010

poli56

Mid Feb I shall have £25,000 which I need to save for just under a year to pay a CGT bill which will be due on 31 Jan 2010.

One option seems to be to open a Birmingham Midshires 1 year bond now. It is presently fixed at 4.2% and to hope it is still open for top-ups Mid Feb -- Am I being too optimistic?

Another option would be try and open what ever the best one year fixed bond available in Feb is, and let it run to maturity and either pay tax late plus interest, or organise an overdraft to bridge the expected 2 weeks next Feb until the bond matures. Any other ideas? I want to avoid all foreign banks.

savetilibleed

You can bet yer life it'll be closed off before you can get your money in. Anyway it says you must invest the full amount you intend to invest on opening.

Don't know if it will still be available in mid Feb, but Julian Hodge Bank have short term fixed interest bonds for between 7 days and 9 months. Bradford & Bingley have a 6 months bond presently.

poli56

savetilibleed wrote: »

Anyway it says you must invest the full amount you intend to invest on opening.

That is not the way I read the special terms & conditions, "Additional deposits are permitted as long as the issue remains open."

But I agree it is unlikely to remain open for a month. Nevertheless, I have started the application process just in case, since one only has to commit £1 initially.

savetilibleed

poli56 wrote: »

That is not the way I read the special terms & conditions, "Additional deposits are permitted as long as the issue remains open."

But I agree it is unlikely to remain open for a month. Nevertheless, I have started the application process just in case, since one only has to commit £1 initially.

Right - I didn't read it all.
I have a Saga bond provided by BM. I would have a BM bond too if it wasn't for the fact I also have a Saga Online Tracker account. Because the Saga Tracker and the BM bond are both online accounts, cookies from the BM site affect the workings of the Saga online site (and vice versa I'd guess), when you come to enter the username and security details. They both look the same except BM is brown and Saga is blue. I had to clear all my cookies to make by Saga account accessible again!

Anyway, going back to your account, yes does no harm to open the account on the offchance it'll still be possible to add when you need.

Cook_County

Another option would be to speak to a Chartered Tax Adviser to see what you can do to reduce the CGT liability instead. It does seem quite steep on a gain of less than £150,000...

poli56

Cook_County,
Forgive me for sounding cynical but why would I spend money on a Chartered Tax Adviser, for simple set of affairs? I am already planning to have my spouse transfer shares to me so that I can sell them at a capital loss- offsetting some of the recent downturn in our modest joint share portfolio. I cant see any other wheezes after studying CGT for a little.

My late aunt really paid through the nose for a tax advice which mostly resulted in filling in her tax return to claim refunds that were only just greater than the fee! I was shocked to see what she was charged for some simple spreadsheet work. As a result of this and other experiences she had, I am very suspicious of the value of paying for advice if one is capable of checking things out on the web, and among the taxation books in the local bookshop!

However, I have followed your advice to the extent of finding local chartered tax people at http://www.ciot.org.uk/membersdirectory.exe. But there does not seem to be any indication of likely charges. After all All I need is ten minutes of someone's time and a few pointers to investigate. Any chance of getting that here on MSE?

Cook_County

1. I do not know if it is simple.

and

2. The work will take more than 10 minutes because the adviser will have to draft a client agreement and identify you for Money Laundering Regulation purposes, each of which take time.

This is irrespective of the work involved. I do not know if your affairs are simple; you have - sensibly - been discrete over the issues here.

poli56

It worked out very well for me. I got the Birmingham Midshires 1 year fixed rate open while it was still available at 4.2%, with a deposit about £3000 a few days after my internet application in mid Jan.

Now, mid February, I was able to still add another £35,000 at the 4.2% fixed rate which will continue until it matures next January.

As it still appears open for deposit by internet transfer from my linked bank account, I am adding more. If I had had to start a fixed rate 1 Yr bond today I would only be getting 3.5% from BM.

I certainly recommend BM fixed rate for service and convenience.