Fixed rate saving account in my name

Lilacteresa

Good morning,
I hope that someone can advise me on the following. My father passed away a few years ago leaving 50% of his estate to my mum and the remaining 50% in a trust for his 3 children. My mother is now down sizing her property and on the sale of her house my share will be approx £75000. My two siblings and myself are in agreement that we should invest our funds to provide an income for my mother.
I have two questions regarding this, assuming that I open a 5 years fixed account with the £75000 this will generate interest for mum of just over £2000 a year (my two brothers will do the same)

As the account will be in my name and will have £75000 will this affect

1. I am disabled and receive the higher rate of DLA
2. I have debts of around £8000 which I am paying back at an agreed monthly amount

Many thanks
Teresa

xylophone

I am not quite sure that I understand what is happening here.

Was your father the sole owner of the family home at the time of his death or was he a tenant in common owning a certain percentage which he willed to a trust with a life interest to your mother?

Lilacteresa

Thank you for the reply, father was owner of the property, His will left half of the house to my mum and half in trust to myself and two brothers, with the safeguard that all the time mum lived there we (children) couldn't sell. Now mum has sold the house for about 450k and purchased a smaller property, the half in trust to the kids is 225 so 75k each and we want to invest the money, in our separate names and pass the interest, about 3% to mum each year as an income. But my concerns are as mentioned in the original post.
I am sorry for not being able to express the situation very well, I wish dad had just made a 'normal' will and left it all to mum

Dan83

From April 16, the first £1000 of interest if tax free, if you get £2000 interest, you will pay tax on £1000.

Being on dla, there maybe T&C's that mean you can claim the tax back, maybe worth looking into?

Also, doesn't the amount of savings you have, have an impact on how much benefits you can claim?

colsten

Dan83 wrote: »

From April 16, the first £1000 of interest if tax free, if you get £2000 interest, you will pay tax on £1000.

the exact date is April 6 2016, and the £1,000 savings interest allowance applies to people who are not higher or advanced rate tax payers.

Dan83 wrote: »

Being on dla, there maybe T&C's that mean you can claim the tax back, maybe worth looking into?

can you elaborate on this?

Dan83 wrote: »

Also, doesn't the amount of savings you have, have an impact on how much benefits you can claim?

DLA is not means tested. http://www.nhs.uk/Conditions/social-care-and-support-guide/Pages/disability-living-allowance.aspx

Some other benefits are but since these aren't mentioned, there probably aren't any.

colsten

Lilacteresa wrote: »

Now mum has sold the house for about 450k and purchased a smaller property, the half in trust to the kids is 225 so 75k each and we want to invest the money, in our separate names

are you saying the money has been released from a trust to you and your siblings? Or has it been put into a trust that must pay your mum an income for life? If so, who is/are the trustee(s)?

Newly_retired

DLA is not means-tested, so is not affected by savings or income, but ESA and Housing Benefit are, so if you get either of those, and then effectively give away your inheritance, this would be seen as deprivation of capital, and you could lose those benefits.
Does your mother need this support from her children? It sounds as though your father did not think so. Did he perhaps want to help his children, especially yourself, as you are on DLA and have debts.?
Does she not have any pension income? Was there no capital for her to inherit, or just the house?

Eco_Miser

Dan83 wrote: »

From April 16, the first £1000 of interest if tax free, if you get £2000 interest, you will pay tax on £1000.

You may pay tax on the second thousand, but if your overall income is less than £17000 (I think = Personal Allowance + Savings Allowance + 0% Starting rate for savings ) you won't.

Westie983

As others have said DLA is not means tested so the amount that you have in savings wont affect this,

What may cause a issue is your debts that you are paying off at a agreed monthly amount, has this been calculated on the amount of savings you have?, so when you get your share of the house sale you will have to increase the amount you pay to your debts?

Thinking if this is debt management company who requires a income and expenditure before working out how much you can afford to pay towards your debts, if this is the case they will need to know the increase in savings.

xylophone

What exactly does your father's will say? What kind of trust was created?