What to do with cash lump from house sale
Discussion
I've got £100k cash from the sale of my primary residence and wifey and I are going into rented for 6 months to a year. I'm a 40% taxpayer, wifey earns nothing as she is Housewifey. We are married.
My plan, shoot it down please......
Put the 100k into our joint account when the conveyancing/estate agent has sorted contract exchange.
Get her to open a high interest saving account, in her name, and dump the 100k in it. (Perhaps £5.6k into a cash ISA in her name, perhaps even the same into cash ISA in my name.)
At the end of the year, file a tax return for her and get all the tax back on the interest. (perhaps 3k interest gross if it's a year)
Will this work (legally) ?
ta
My plan, shoot it down please......
Put the 100k into our joint account when the conveyancing/estate agent has sorted contract exchange.
Get her to open a high interest saving account, in her name, and dump the 100k in it. (Perhaps £5.6k into a cash ISA in her name, perhaps even the same into cash ISA in my name.)
At the end of the year, file a tax return for her and get all the tax back on the interest. (perhaps 3k interest gross if it's a year)
Will this work (legally) ?
ta
Legal = yes, gifts between spouses are tax free.
Personally I'd do something similar if I was in your position;
Pay off any other debts with rates higher than what you'll receive in interest.
max out cash isa's in both names and if you have the attitude for it, use your stocks and shares isa. The market is reasonably priced at the moment.
Stick the rest in a high interest account in your wife's name (no need for joint as it's below the £85k FSA guarantee) put the interest back into the account if paid monthly. Bear in mind that some of these accounts have penalties for withdrawing early so if you need to move on a property then that might be an issue.
Personally I'd do something similar if I was in your position;
Pay off any other debts with rates higher than what you'll receive in interest.
max out cash isa's in both names and if you have the attitude for it, use your stocks and shares isa. The market is reasonably priced at the moment.
Stick the rest in a high interest account in your wife's name (no need for joint as it's below the £85k FSA guarantee) put the interest back into the account if paid monthly. Bear in mind that some of these accounts have penalties for withdrawing early so if you need to move on a property then that might be an issue.
QED87 said:
Legal = yes, gifts between spouses are tax free.
Personally I'd do something similar if I was in your position;
Pay off any other debts with rates higher than what you'll receive in interest.
max out cash isa's in both names and if you have the attitude for it, use your stocks and shares isa. The market is reasonably priced at the moment.
Stick the rest in a high interest account in your wife's name (no need for joint as it's below the £85k FSA guarantee) put the interest back into the account if paid monthly. Bear in mind that some of these accounts have penalties for withdrawing early so if you need to move on a property then that might be an issue.
Ok, thanks, interesting.Personally I'd do something similar if I was in your position;
Pay off any other debts with rates higher than what you'll receive in interest.
max out cash isa's in both names and if you have the attitude for it, use your stocks and shares isa. The market is reasonably priced at the moment.
Stick the rest in a high interest account in your wife's name (no need for joint as it's below the £85k FSA guarantee) put the interest back into the account if paid monthly. Bear in mind that some of these accounts have penalties for withdrawing early so if you need to move on a property then that might be an issue.
Don't have any debts (yay!) to pay off. Already using my stocks and shares ISA allowance for the year.
Back onto the high-interest, no-penalty saving account then. If it was for longer than 12 months I'd go with a Bond, but I think we'll purchase a house before then and use up the cash. I'm also considering two accounts with £50k in each for my wife, that way all the money is under the £85k guarantee. Funny times ahead, I'm not gambling with my property gains...
any other thoughts?
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