help!

samuela66

I am about to sell my house, will have about 70k to save for about 6-8 months whilst i look for a new house, is this money liable to be taxed in any way, or will i just be able to save it! If it is taxed how much can the tax man take off me, or can i put it in an off shore account! ???

deemy2004

Yes, the INTEREST earned on the £70k will be TAXED as follows -

If your working, 20% of any interest on the £70k will be deducted at source.

If your not working you need to fill in form R85 to get the interest gross

If your a higher rate tax payer then you will be liable for more tax as per your self assessment return.

Walletwatch

Of course, to add to that, if you're married, and your wife is not working, or is on a lower tax slab than you, you can save the amount in her name, and pay zero or lower taxes.

samuela66

So they tax me on the INTEREST only, that's not as bad as I thought!! I am female so unforunatley do not have a wife to pop the money in her name! Does anyone know if I can put it in an offshore account or do the same rules apply, can i safely leave it in this country for those months and work abroad, do the same tax rules apply!
many thanks for all your help!

lisyloo

I am female so unforunatley do not have a wife to pop the money in her name!

The tax rules apply equally to both sexes.
Either gender can "gift" anything to their spouse tax free. It is useful to put the money in the name of the lowest rate tax payer.

Obviously doesn't help if you're not married.
Only applies to legally married couples.

Walletwatch

Apologies, didn't intend to sound sexist on my response

samuela66

You didn't sound sexist at all walletwatch! Thanks for the advice, just don't wanna do the wrong thing! ::)

Rafter

For that much it may be worth talking to someone at the bank about a term deposit or money market rates.

However, the savings market is so competitive at the moment you may do just as well with a regular savings account.

Probably best putting the money in two different accounts so you are covered by the savings guarantee scheme. Although there hasn't been a major bank failure in the UK since BCCI, you are only covered up to £35k I think with any one institution under the scheme.

R.

Walletwatch

Probably best putting the money in two different accounts so you are covered by the savings guarantee scheme.  Although there hasn't been a major bank failure in the UK since BCCI,  you are only covered up to £35k I think with any one institution under the scheme.

R.

Reproducing a post by Deemy from elsewhere on this aspect for reference:

Compensation stuff -

Deposits: £31,700 per person (100% of £2,000 and 90% of the next £33,000).
The Scheme is triggered when an authorised deposit taker, (such as a bank, building society or credit union) is unable, or likely to be unable, to repay its depositors. Joint account holders are each entitled to claim compensation to up to £31,700. The limit applies to the total amount a person has deposited with a firm, not each account held.

Investments: £48,000 per person (100% of £30,000 and 90% of the next £20,000).
FSCS provides protection if an authorised firm is unable to pay claims against it. For example:

for loss arising from bad investment advice, poor investment management or misrepresentation;
when an authorised investment firm goes out of business and cannot return investments or money.
Investments covered include: stocks and shares; unit trusts; futures and options; personal pension plans and long-term policies such as endowments.

Mortgage advice and arranging: £48,000 per person
From 31 October 2004 the Scheme will be able to pay up to £48,000 (100% of the first £30,000 and 90% of the next £20,000) for claims against authorised mortgage firms that are unable to pay claims against them.


Long-term insurance (e.g. pensions and life assurance) firms: unlimited, 100% of the first £2,000 plus 90% of the remainder of the claim. Policyholder protection is triggered if an authorised insurer is unable, or likely to be unable, to meet claims against it, for example if it has been placed in provisional liquidation or administration.


General insurance firms: unlimited:

compulsory insurance (e.g. third party motor): 100% of the claim.
non-compulsory insurance (e.g. home and general): unlimited, 100% of the first £2,000 plus 90% of the remainder of the claim.
Policyholder protection is triggered if an authorised insurer is unable, or likely to be unable, to meet claims against it, for example if it has been placed in provisional liquidation or administration.

General insurance advice and arranging* : unlimited, comprising 100% of the first £2,000 plus 90% of the remainder of the claim. Compulsory insurance is protected in full. *For business conducted on or after 14 January 2005.

So hmmm, you could say things are pretty safe

samuela66

Thanks Everyone for all your help! have a great christmas!! ;D