Large amount to invest

kydhol

Due to our house sale we have over £500k to invest, while we are in a rented property. We do not want to tie it up for long as we are looking for property to buy.
My question is I am a non-tax payer - my husband is in the highest tax bracket.
We have 3 children. Can I split (max £80K per person) our money between our children and myself to get the highest interest rates with out having to pay tax?

Dexters_Indignation

Please be aware this is a public forum.
Be wary of any advice!!!


LOL

If anyone claims to be the son of the president of ??????? or in line to the throne of ?????? they may not be....

Check this before you part with any cash!

Also below
http://www.moneysavingexpert.com/family/avoid-phishing-scams

http://www.moneysavingexpert.com/news/protect/2011/09/beware-cold-callers-claiming-to-be-moneysavingexpert

calypso_rhapsody

I beleive that there is no problem with the money being held in your name - as gifts between spouses are not a problem but i'd be wary of holding money in children's names .. it would legally be theirs. Don't have kids so not up on all the implications but i'd steer clear if i were you.

grey_gym_sock

putting it in your children's names doesn't work, because (a) if they get over £100 per year income from a gift from a parent, it's taxed as the parent's income, and (b) if you're going to take the money back, it's not a real gift anyway.

putting it all in your name instead of your husband's in perfectly legitimate. if you have no other income, then the first £8,105 of interest is tax free, then next £2,710 is taxed at 10%, then at 20%. e.g. if you get 3% interest, that would be £15,000 per year, so you'd pay £1,108 income tax. however, if you're pay some tax, 20% is deducted at source (i.e. £3,000), and you'd have to claim the rest back from HMRC.

those tax bands are per tax year (the year ending on 5 april), and some accounts only pay interest annually, so make sure you get some interest paid in this tax year (up to 5 april 2013), or you'll waste your £8,105 personal allowance for this year.

also, perhaps you should stick to £85k per bank/BS in case they go bust, though that would mean having 6 accounts ... or at least use more than 1institution.

gadgetmind

grey_gym_sock wrote: »

also, perhaps you should stick to £85k per bank/BS in case they go bust, though that would mean having 6 accounts ... or at least use more than 1institution.

Yes, and there is an MSE guide on this.

http://www.moneysavingexpert.com/savings/safe-savings

That covers splitting between different banks and also the easier option of using NS&I but waving bye bye to higher interest rates.

Credit-Crunched

£500k to invest,

We do not want to tie it up for long

These two statements are contradictory, investing is a long term objective 5-7 years as a minimum and in the current climate maybe longer.

If you need access to the funds at any time but would like to have an element of return then to ensure you are under the FSCS you could start 6 instant access savings accounts in your name ( to prevent 40% taxation on the money in your husbands name)

Fixed term bonds do not appear to be a good recommendation (unless you will not need access to the funds for a minimum of 12 months, then may be worth looking at some fixed interest returns)