What to do with spare pennies?

jamesd

Has your partner ever lived in the flat that is being sold? If yes, be sure to do the CGT calculations for the time he was entitled to primary residence relief directly and claim the proper amount of letting relief, a huge deal worth tens of thousands in saved tax.

If he has never lived there then moving there for three to six months could save him those tens of thousands.

jamesd

I'd expect to be making around £16,000 before tax but after 2% bad debt allowance from P2P on the circa £160,000 you expect to have available. I do, no reason you can't as well. Though bad debt hasn't been as high as the 2% I allow for it.

Not quite enough to make the mortgage free but still handy and it won't take long to save enough for an extension, or, probably better, fund it from a bigger mortgage. Cheaper to borrow than cut down on the investing. Affordability calculations might not allow it at the moment, though.

If not doable on the mortgage you might see what the two of you can get in the way of credit card 0% purchase deals. A few tens of thousands could cover a lot of the work at very low cost and balance transfer deals to keep the borrowing cheap are readily available. Repayment fallback would be either selling some of the investments or a remortgage or personal loan, both cheap these days.

TallulahBelly14

Thanks James, I need to look into CGT - I made some estimates based on the info on the HMRC site, but I'll get proper advice as I'd rather not pay more than we need to.

Another update:-

Fortunately, Halifax have given me a lower rate for the next two years (1.84% rather than 3.74%) so that significantly reduces my interest payments. If I pay a flat £1,500 per month that makes a dent in the balance while still being affordable. It's in my own name only so no worries about stamp duty, and there was no fee or valuation needed. Hurrah.

And I'm seeing an IFA next week to help me with wills, pensions, life insurance etc. They've said they charge a fee so they can be completely impartial, rather than taking kickbacks from the providers. That makes sense to me, and they've given some good nuggets of advice already.

My next step is to understand the whole investment area - I stumbled onto a Reddit site called FIRE (Financial Independence, Retire Early) which I've picked up a few bits from. There's so much to learn!