Help!Need some advice 25 October 2004 at 4:56PM in Savings & investments 8 replies 925 views

Holesinpockets

I have about £40-£50K in a variety of forms. I would like to consolidate into the best tax free savings account. I am a high rate tax payer and my wife is a 22% rate tax payer. I was considering National Savings options. Any other ideas? I don't need quick access.

thanks

Robert_Sterling_3

Put it into a joint account.
Notify the inland revenue , Form R17, that 99% is your wifes and 1% is yours. This is OK legally.

Holesinpockets

Thanks....do you mean a normal high yield, long term savings account?

Shinds

Egg and Bradford & Bingley are offering very good rates on their Savings Accounts at the mo... about 5.5%

johnllew

Put it into a joint account.
Notify the inland revenue , Form R17, that 99% is your wifes and 1% is yours.  This is OK legally.

It might be easier just to invest it in accounts in your wife's name; that is if you trust her not to run off with it.

As you're intersted in tax-free accounts, I assume you've both already used up your Mini-Cash ISA allowance for the year?

Holesinpockets

Thanks...I checked with the Inland Revenue and it seems the R17 option is no longer available since independent taxation came in. Seems that if its a joint acoount it is considered 50/50.

Rafter

If you don't want to risk your money on stock ISAs you are limited to £3k each in cash ISAs in any 12 month period ending 5 April.

Probably your best bed to invest some of it in National Savings Certificates which are also tax free. Some in your name, some in hers. You have a choice of index linked or fixed rates and given the tax benefit the rates aren't too bad.

You won't in the short term be able to get everything in one place tax free unfortunately.

Given the inland revenue ruling on joint accounts put any savings you are going to have to pay tax on in your wifes name to minimise your bill.

For that much money, I would consider using a low cost index tracker for at least some of it. You would be taking a risk with your capital, but over the longer term the return from share based investments has considerably beaten the return on savings accounts.

Good luck.

R.

PS. If you have a mortgage, you might get an even better return paying a chunk off that and paying of your home loan earlier. Just a thought, if you don't need £40-£50k for anything now.

You could also get an offset mortgage and effectively earn around 5% tax free through offsetting your savings against the mortgage balance and only paying interest on the difference.

Holesinpockets

Thanks, great site as a newcomer. I think I'll split between National Savings in my name, tax free, and the rest in the Mrs's in B&B 5.5% interest. Maybe one of these days our confidence in the stock market will allow us to be more courageous.

Robert_Sterling_3

One man's courageousness is another man's foolhardiness.