Need some advice please

Sparksy_2

I'm looking for some advice please.


I am a higher rate tax payer due to my income from my current job and a pension from my old one. I find myself in the fortunate position of having just been given a gift of £10k from my elderly mum and I want to put it away somewhere that will earn a few bob interest but will also give me instant access.


My questions are, do I have to declare this gift to the tax man and get walloped for tax? Do I have to declare the interest I earn too? If I do have to declare it, how much am I likely to lose?


I have used up my 3k cash ISA allowance for this year. Would it be advisable to put some into a Stocks ISA?


Sorry if this sounds daft.


Thanks

oldfella

do I have to declare this gift to the tax man and get walloped for tax?

no

Do I have to declare the interest I earn too?

yes

If I do have to declare it, how much am I likely to lose?

40% of the interest


I have used up my 3k cash ISA allowance for this year. Would it be advisable to put some into a Stocks ISA?

depends on your attitude to risk - I would, maybe wait a while though

Aegis

If you want instant access to it, you're probably better off avoiding stocks and shares, as those may fluctuate quite a lot in value, making it much less convenient to take money out as and when you need it.

If you need instant access, an instant access savings account might be your best bet, but those won't be too favourable to you with regard to interest rates because of the 40% hit that the taxman will impose on them!

ManAtHome

Do you really need instant access (seeing as it's a presumably unexpected gift)..?

NS&I index-linked certs could be worth a go - even if you cash in after a year, the 3-year one pays RPI plus 1.1% tax-free (zich if you cash in before a year). You don't have to declare these on your tax return.

Sparksy_2

Thanks for the advice folks.

I was more concerned with having to pay tax on the lump. Not too happy about paying it on the interest either, but will have to swallow it. I would prefer not to tie it up for a couple of years. Never know when it may come in useful.

Thanks again.