Inheritance question

kidmugsy

You say you earn £45k; presumably your rental income is on top of that. Therefore you are exposed to 40% tax on it. Loopy. If you really insist on keeping it (on the well known trait of asking for advice and then rejecting everything that doesn't suit your existing prejudices) then why not at least gift it to your wife so that only 20% tax is paid?

MM2002

kidmugsy wrote: »

You say you earn £45k; presumably your rental income is on top of that. Therefore you are exposed to 40% tax on it. Loopy. If you really insist on keeping it (on the well known trait of asking for advice and then rejecting everything that doesn't suit your existing prejudices) then why not at least gift it to your wife so that only 20% tax is paid?

:rotfl: yup, already done that!!!128077;
Believe me, am very much considering all advice(and very appreciative of it too!). Reckon I’ll start with opening these accounts with 5% interest and pay to open accounts. Better start buying some box files!!!128514;!!!128514;

Thrugelmir

MadMatt2002 wrote: »

(£315 mortgage £1200 rent income)

What's your mortgage product?

MM2002

Santander 1.89% 2 yr, interest only on 198k coming to an end in August. Doubt I’ll see that again!!!128577;

kidmugsy

MadMatt2002 wrote: »

:rotfl: yup, already done that!!!

Then why did you say the opposite?

MM2002

What? I never said I’m paying 40% on the btl anywhere? :mad:

My op is questioning how to best use my inheritance. I’m quite happy with my btl at the mo.

MM2002

xylophone wrote: »

It seems to me that you should both obtain a state pension forecast.

https://www.gov.uk/check-state-pension

I would look into pension provision for your wife.

https://www.taxcafe.co.uk/pensionmagic.html

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/pension-tax-relief-eligibility

If she is earning £15,000 this tax year, she can pay up to £12,000 into a personal pension and receive tax relief of £3,000.

If neither of you have ever had a Nationwide Flexdirect current account, you could open one each and a joint and earn 5% for a year on a total of £7,500.

A 5% Flexclusive monthly saver is also available.

Then three TSB Plus - total of £4,500 @3%.

Assuming that you can drum up the 12 DDs between you, you might each open a couple of Tesco current accounts- (3% on a total of £12,000).

Do your children have CTF/JISA? It may be worth considering a gift to them.

https://www.gov.uk/junior-individual-savings-accounts

Following this advice first steps have been made! 3 nationwide flex direct accounts applied for!

Many thanks xylophone :j

atush

Radiantsoul wrote: »

The CGT would be large, but you would still have quite a bit left over.
You have a gain of £100k less whatever selling costs. You have a 11k annual allowance, and pay 28% on anything after that. So you will probably pay £24-£25k out of the proceeds.

You can double your CGT allowance by transferring half the house to your wife. This saves you the most tax (if it isnt held that way already).

I agree, before any more BTL (and with t he new tax regime i dont think BTL is as good anymore) you should address your wife's pension. She will have a full PA in retirment, and this doesnt even cover a full SP so should have some left over. If she retires before SPA, then has her full allowance going to waste.

So basically, her pension will be tax free if using her PA to withdraw it.

MM2002

atush wrote: »

You can double your CGT allowance by transferring half the house to your wife. This saves you the most tax (if it isnt held that way already).

I agree, before any more BTL (and with t he new tax regime i dont think BTL is as good anymore) you should address your wife's pension. She will have a full PA in retirment, and this doesnt even cover a full SP so should have some left over. If she retires before SPA, then has her full allowance going to waste.

So basically, her pension will be tax free if using her PA to withdraw it.

The BTL is owned 99% by the wife already, so that’s been done, albeit a bit late(quite annoyed with my accountant for not suggesting that on getting the BTL, missed out on 2 years!)

Trying to understand the next paragraph on my wife’s pension. I’ve never had to deal with pensions, Same as tax really, always left it to my employer. Thought my pension pot of 100k would be fine, learning now it certainly isn’t, saying that, all of my parents savings went to care homes in the latter stages so don’t want to struggle through life saving to pay for care now!

Again, thanks for your reply:money:


Have emailed my pension advisor for advice, but as in my op prefer unpaid non biased advice such as this, so many thanks for the insight. Will start doing some homework.