50k to save

Legacy_user

i hope somebody can help me with the following dilemma

i have put my house on the market again (after it previously fell through a few weeks ago) and rather than buy a house and form another chain my wife and mine parents have said we can move in there rent free when our sale has gone through.
we stand to make around 50 thousand from sale of house which we obviously dont want lying around my inlaws house!!!
we want to put it into a short term flexible plan so we can call upon it when we have found the right house we obviously want to yield as much interest but with the flexability of getting at it.
i pay tax but my wife doesnt.
does anybody have any advice for me where i pay the least tax and gain the most short term interest.
i hope to move on within 6 months of moving out of my house

hope someone can help thanks

barry

laminki

cahoot internet bank

savings account

5.5%

instant access

maximum limit 50k (how convenient )

50k @ 5.5% for about 6 months is around 2.5k

so putting it all in an account in your wife's name would potentially mean not paying tax on that 2.5k - or being able to reclaim that tax (approx £5OO IF LOW RATE TAX PAYER, £1K if high rate taxpayer) but I'm no accountant

You married her so I'm assuming you trust her not to scarper with the cash

DiggingOut

Also use your mini-cash ISA allowances if you haven't already, tax-free savings of £3K for each of the two of you. Would be looking at the Abbey postal ISA right now as probably the best option.

quickquid

Laminki is right - use your wife's allowance in Cahoot at 5.5%. Short-term, an instant cash ISA is not as advantageous as her tax breaks on 50k per annum.

Tim_L

cahoot internet bank

savings account

5.5%

instant access

maximum limit 50k (how convenient )

50k @ 5.5% for about 6 months is around 2.5k

In fact it's less than that - about 1.4K gross. I think Laminki's calculation is based over 12 months, not 6.

laminki

glad somebody noticed the 'deliberate' mistake :-[

DiggingOut

Laminki is right - use your wife's allowance in Cahoot at 5.5%.   Short-term,  an instant cash ISA  is not as advantageous as her tax breaks on 50k per annum.

Sorry, I overlooked this:

i pay tax but my wife doesnt.

Quickquid is correct.

System

I am in exactly the same position but will be taking the money back out in about 5/6 months. Do I then have to wait until the end of the year for my interest?

System

thanks for all your help much appreciated just got to sell the bloody house now!!!

thanks again

bazza

System

All this talk about Cahoot...........anyone out there actually got one of these accounts ?.........and how safe is it putting your money somewhere on a screen, and not being able to walk into a branch......the interest rate is very tempting...but where are these people ??? ???

lisyloo

Yes I have one and have used one before.

Putting your money in Cahoot is as safe as any other bank (with or without branches).
Cahoot are part of Abbey National.

All the usual banks are affliated to an FSA which guarantees compensation (up to certain limits) in the unlikely even of the bank going bust.

Putting your money is a bank is just about the safest think you can do as putting it under the mattress entails some risks.

Whether there is a branch to walk into or not, is pretty much irrelevant.