Sellimg mums house to fund nursing home

sjchil

Hi I new to all this
I have to sell my mums house to fund her nursing home, where is the best place to invest this money (about 400,000.00), I have been thinking about ns&i so we don't have to pay tax, anyone got any views:o

jonesMUFCforever

You need an independent financial adviser to advise you about this minefield.

Why do you think that NS&I products are tax free?

sjchil

Index-linked Savings Certificates from Martins savings page
I want somewhere the money is safe and he recommends government owned savings

jem16

sjchil wrote: »

Hi I new to all this
I have to sell my mums house to fund her nursing home, where is the best place to invest this money (about 400,000.00), I have been thinking about ns&i so we don't have to pay tax, anyone got any views:o

There are really only 2 options worth considering.

1. Invest the money and use the income from it to pay the care fees.

2. Use an immediate needs annuity
http://www.sharingpensions.co.uk/annuity_immediate_needs.htm

Both options really need an IFA to advise you.

As to NS&I only certain products are tax-free with a maximum of around £93k able to be used.

jem16

sjchil wrote: »

Index-linked Savings Certificates from Martins savings page
I want somewhere the money is safe and he recommends government owned savings

It depends on what you regard as safe.

Index-linked certificates will keep ahead of inflation but only if you leave the money invested and not withdraw any of it so how are you going to use it to pay the care home? As soon as you start withdrawing your money will lose value due to inflation. You will also only be able to save £30k in these.

Investing it correctly will allow you to take an income to pay for the care home plus allow the capital to keep growing.

The alternative is to use the immediate needs annuity. This would pay the care home directly and with no tax payable.

KeithEssex_2

sjchil wrote: »

Hi I new to all this
I have to sell my mums house to fund her nursing home, where is the best place to invest this money (about 400,000.00), I have been thinking about ns&i so we don't have to pay tax, anyone got any views:o

The NS&I products are paid gross and some of them don't need to be declared on your tax return (e.g. Fixed Interest and Indexed Linked).

Others (e.g. Income Bond) are taxable but it's down to you to declare this income via the tax system as you will receive the gross interest.

You can see the tax status of all their products here:-

http://www.nsandi.com/interest-rates/index.jsp

NS&I might be a good place for the money whilst you take full financial advice on the best way to fund the nursing home. Any plans will clearly depend upon your mother's age and general health etc.

Good luck with this.

Biggles

Having been down this road, I can endorse the benefits of an Immediate Care Needs Annuity. For a single premium, the care home will be paid a monthly sum (tax-free) indefinitely. This will mean that the balance of your mother's funds can be invested without any risk of 'running out of money' if she, as we hope, lives to a ripe old age.

NHFA (now owned by HSBC) are one of the experts in the field and they will send an IFA to see you and to get competitive quotes from the three firms that provide these annuities. https://www.hsbcpensions.co.uk/nhfa/pages/index.asp

KeithEssex_2

There is a free quide available via the Daily Telegraph that might help you:-

www.telegraph.co.uk/readerguides

Daily Telegraph Guide To Choosing and Funding a Care Home