About to receive an inheritance, what is the best way to maximise this gift and minimize tax

dsandoreo

Brie said:

Can I also add that I'm pleased that the top of your priorities is to ensure your cat has a big fish?  I hope your cat appreciates it though I suspect there will be little thanks other than to sit about cleaning it's whiskers after the feast.

Oh he loves his fishies....

dsandoreo

Albermarle said:

OP,
If you are reluctant to divulge your income ( although the forum is totally anonymous) then all you need to say is something approx.
None?
Below £17750
Between £18750 and £50,000
Above £50K
Then we can say how much tax you could have to pay

Hi< it says in the post what my income is now, and how that may change on the new year.

dsandoreo

Dazed_and_C0nfused said:

If i put it in the Marcus account i would get around 8K interest a year, i know tax free limit is 1k (i think).
So if i did that would i only pay tax on the other 7k of interest?

Assuming it's not an ISA then all of the interest is taxable, there is no tax free limit for non ISA interest.

On your current earnings you are some way off being a higher rate payer, even with £8k of interest.

So the first £1,000 would be taxed at 0% and the rest at 20%.

But with your potential change of circumstances that is likely to become £500 taxed at 0% and the rest at 40%.  Although if you agree a much lower salary in return for extra employer employer pension contributions you could remain a basic rate payer.  But the full £8k interest is part of your taxable income and used to determine if you are a higher rate payer or not.  Then the £500/£1,000 is applied after that

I am not sure what pensions provider the new company uses... i hope it isnt nest and is something i can a) salary sacrifice into and b) pick what i invest into....

but thanks, that expanantion makes perfect sense

penners324

Buy an apartment for house with the inheritance. Would be in within 4 to 5 months.

What you paying on rent is immediately freed up less extra bills.