Advice please

Essex22011

The_frugal_fairy wrote: »

Hello

I would take some financial advice from an accountant regarding the taxation. There are limits on gifting money and assets. Inheritance tax and capital gain implications.

Also I would be wary of buy to let as the tax rules regarding this are also changing.

Hiya we have an accountant already, he said there is no limits or tax payable with gifting so it's a case of sliding scale until 7 years is up in the hope that we will avoid IHT X

ian1246

I would avoid Buy to Let like the plague. Returns aren't great, with a good chance of no return should you get a Tenant who does not pay. Future governments may yet crack down on Buy to Let even more. Plus if you ve got a 2nd baby on the way - are you really going to want the added stress of becoming a new landlord?!

Personally, I'd look at paying the amount off the mortgage which you need to get it down to a 60% LTV by the time of your next renewal. If its currently valued at £465,000, that would be £279,000 - so £49,000 paid off the mortgage.

Then take the remaining £51,000 and rather than over paying your mortgage, put it into a fixed saver of however many years it will be until your mortgage fixed team expires.

I.e. if your mortgage is fixed for 4 and 1/2more years, as an example, I would put that £49,000 into a 4 year fixed saver.

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

I.e. you can get Fixed Savers paying more than 2% interest for anything more than 1 year fix's - a 4 year fix as an example can be as high as 2.5% interest. By ensuring the fix matures at the same time/just before your mortgage fixed term ends, it ensures you get a better return on that remaining £51,000, whilst then having the option - when your mortgage deal comes out of its fixed period - to review it at a later date and decide then whether you want to overpay (Early Repayment Charges are removed when you go to standard variable rate)the mortgage or fix for your mortgage for another XX Years and also then stick the ££ into a fixed saver for XX years.