Just in case anyone is not aware and would benefit from this, there is currently an additional relief from inheritance tax if you are able to gift monies on a regular basis out of after tax surplus income, i.e. more than the £3,000 annual exemption.
I am currently putting money each year into Junior ISAs for three grandchildren and until I became aware of this a couple of years thought there was a potential IHT exposure on any excess over and above the £3k per annum I was contributing to these ISAs. However, if you can compile records for each tax year demonstrating you can afford to gift these monies out of surplus after tax income (including that from investment income), then those monies are not subject to IHT. The attached link outlines the record-keeping required. I just wait until I have submitted my tax return each year and then update a spreadsheet showing my income, expenditures (best estimate) and annual gifts for the tax year and keep this in a file along with my will in order my executors can use it when the time comes.
Obviously, I hope this relief isn't changed in the forthcoming budget!
Be aware it really has to be true surplus income. If you give some of your income away but you are drawing on any other cash (i.e. savings) to buy a new car periodically, pay for a holiday each year etc then it's not surplus income. You pretty much have to be fully living just on your incomes. EDIT, don;t forget as well as the £3k you can gift £250 each to as many people as you like - bank details to follow ;-)
In cases where a lot of the money subject to IHT is tied up in property - how do the inheriting children pay off that bill without selling the house immediately? Particularly in cases if they are inheriting a large property - what if they don't have hundreds of thousands of pounds sitting around to pay off 40% over the 500k limit? Is there some sort of time allowance to let them do it?
My mum and her siblings had to come to come up with over £300k back in 2001 to part settle my grandads estates IHT bill before they would release probate. Not sure if the grants are new, as don't recall it at the time although there wouldn't have been the cash to draw on anyway.
I have invested a substantial part of my capital in loan trusts whereby any interest gained is not subjected to IHT and cannot Iñbe used to pay for care.
I have invested a substantial part of my capital in loan trusts whereby any interest gained is not subjected to IHT and cannot Iñbe used to pay for care.
Do you take loan repayments out of interest? My understanding was that the OS loan still forms part of your estate for IHT but yes any gain is free of IHT.
Just in case anyone is not aware and would benefit from this, there is currently an additional relief from inheritance tax if you are able to gift monies on a regular basis out of after tax surplus income, i.e. more than the £3,000 annual exemption.
I am currently putting money each year into Junior ISAs for three grandchildren and until I became aware of this a couple of years thought there was a potential IHT exposure on any excess over and above the £3k per annum I was contributing to these ISAs. However, if you can compile records for each tax year demonstrating you can afford to gift these monies out of surplus after tax income (including that from investment income), then those monies are not subject to IHT. The attached link outlines the record-keeping required. I just wait until I have submitted my tax return each year and then update a spreadsheet showing my income, expenditures (best estimate) and annual gifts for the tax year and keep this in a file along with my will in order my executors can use it when the time comes.
Obviously, I hope this relief isn't changed in the forthcoming budget!
Be aware it really has to be true surplus income. If you give some of your income away but you are drawing on any other cash (i.e. savings) to buy a new car periodically, pay for a holiday each year etc then it's not surplus income. You pretty much have to be fully living just on your incomes. EDIT, don;t forget as well as the £3k you can gift £250 each to as many people as you like - bank details to follow ;-)
In cases where a lot of the money subject to IHT is tied up in property - how do the inheriting children pay off that bill without selling the house immediately? Particularly in cases if they are inheriting a large property - what if they don't have hundreds of thousands of pounds sitting around to pay off 40% over the 500k limit? Is there some sort of time allowance to let them do it?
My mum and her siblings had to come to come up with over £300k back in 2001 to part settle my grandads estates IHT bill before they would release probate. Not sure if the grants are new, as don't recall it at the time although there wouldn't have been the cash to draw on anyway.
Thanks Rob7Lee, that's a good reminder. I am including holidays in my annual expenditures out of surplus income. However, I am pondering whether or not to buy a new car sometime in the next year or so. I normally keep cars for several years but am not yet ready to move over to an electric vehicle. So I was thinking of potentially leasing an ICE car for say 3 years, instead of buying this time around. Given your reminder, an added incentive would be that I could cover the leasing cost out of income rather than funding a purchase out of savings and therefore could continue to evidence I can cover these gift monies out of surplus income.
I have invested a substantial part of my capital in loan trusts whereby any interest gained is not subjected to IHT and cannot Iñbe used to pay for care.
Do you take loan repayments out of interest? My understanding was that the OS loan still forms part of your estate for IHT but yes any gain is free of IHT.
I must admit I’ve only had the loan trust x 3 for one year and interest has returned for the first year of investments at 11%. I don’t plan on touching the money unless I absolutely need to. Yes the amounts invested in the loan trust is subject to IHT but the interest escapes the clutches of the Government’s IHT.
I have invested a substantial part of my capital in loan trusts whereby any interest gained is not subjected to IHT and cannot Iñbe used to pay for care.
Do you take loan repayments out of interest? My understanding was that the OS loan still forms part of your estate for IHT but yes any gain is free of IHT.
I must admit I’ve only had the loan trust x 3 for one year and interest has returned for the first year of investments at 11%. I don’t plan on touching the money unless I absolutely need to. Yes the amounts invested in the loan trust is subject to IHT but the interest escapes the clutches of the Government’s IHT.
The whole point of a Loan Trust is that you try to use some or even all of the money in it. Be that the 5% withdrawal allowance (if in an Investment Bond) or as ad hoc lump sums.
In your case you could have simply put the money in a non-interest bearing account if all you are doing is avoiding any growth being part of your Estate.
I have invested a substantial part of my capital in loan trusts whereby any interest gained is not subjected to IHT and cannot Iñbe used to pay for care.
Do you take loan repayments out of interest? My understanding was that the OS loan still forms part of your estate for IHT but yes any gain is free of IHT.
I must admit I’ve only had the loan trust x 3 for one year and interest has returned for the first year of investments at 11%. I don’t plan on touching the money unless I absolutely need to. Yes the amounts invested in the loan trust is subject to IHT but the interest escapes the clutches of the Government’s IHT.
Not really clear of what you are achieving by the trusts. The original amounts remain subject to IHT, the interest isn't, but then if you spend the income, or if not and it's surplus income you gave it away, it wouldn't attract IHT either?
I'm never convinced these trusts will work to avoid the care home fee's in most instances as can easily be challenged.
Also are they not akin to offshore trusts we bemoan the rich having to avoid tax?
Good for anyone riding that wave, but I wouldn't touch them with a bargepole (other than as part of some wider funds I hold). And they're only up 1.4% over the last month, though I appreciate you can pick a time frame to support whatever point you might want to make. What would happen to the price if anything happened to Elon?
Good for anyone riding that wave, but I wouldn't touch them with a bargepole (other than as part of some wider funds I hold). And they're only up 1.4% over the last month, though I appreciate you can pick a time frame to support whatever point you might want to make. What would happen to the price if anything happened to Elon?
Got a mate who thinks the sun shines out of Musk’s arse! He has basically lumped all his savings into Tesla shares and is banking on them to see him through as a pension substitute. As you suggest without Musk what would be left.
Depending on where you get your data from, 40-47% of Tesla shares are owned by retail investors, compared with 13.9% of the S&P 500 as an average....
Calling it a meme stock would be unfair but there is definitely a cult of personality surrounding Musk that has put Tesla where it is in terms of share value. I suppose the key question is if that translates into sales.
Personally, I feel like the Chinese will eventually conquer the EV market and we are pissing into the wind trying to stop them.
i see little Tommy Sandgaard's Zynex results for Q3 are just out and the price has risen 8% on the back of them. I'm still a small holder, but well under water on those.
anybody use the trading212 app and can recommend or advise against?
not looking to invest, just put a bit of money form an expired savings account somewhere earning a bit of interest.
The headline rate is 5.1% and wondered if this is accurate
Not used the trading part but have a cash ISA with them. Current rate is 5.1% with interest paid daily. So far so good and have found the App works fine although not tried to transfer or draw any money out so can't comment on that aspect.
anybody use the trading212 app and can recommend or advise against?
not looking to invest, just put a bit of money form an expired savings account somewhere earning a bit of interest.
The headline rate is 5.1% and wondered if this is accurate
Not used the trading part but have a cash ISA with them. Current rate is 5.1% with interest paid daily. So far so good and have found the App works fine although not tried to transfer or draw any money out so can't comment on that aspect.
Use it for trading shares and such as there's 0 fees and only doing it with pocket money, quite like the app though not used it for the same purposes as you are intending to.
anybody use the trading212 app and can recommend or advise against?
not looking to invest, just put a bit of money form an expired savings account somewhere earning a bit of interest.
The headline rate is 5.1% and wondered if this is accurate
Not used the trading part but have a cash ISA with them. Current rate is 5.1% with interest paid daily. So far so good and have found the App works fine although not tried to transfer or draw any money out so can't comment on that aspect.
Use it for trading shares and such as there's 0 fees and only doing it with pocket money, quite like the app though not used it for the same purposes as you are intending to.
As above, its great for what you describe. HL is good for savings and funds but too expensive for buying and selling small numbers of shares
Every time I think lloyds share price is going to go up to a level I want to sell at it plunges again. Very annoying
Motor finance court case went in favour of consumers last week & Lloyds are a big player in that market. They set £450m aside to cover claims, but expected to be higher.
anybody use the trading212 app and can recommend or advise against?
not looking to invest, just put a bit of money form an expired savings account somewhere earning a bit of interest.
The headline rate is 5.1% and wondered if this is accurate
Not used the trading part but have a cash ISA with them. Current rate is 5.1% with interest paid daily. So far so good and have found the App works fine although not tried to transfer or draw any money out so can't comment on that aspect.
Same here, all seems OK so far, but like you, not withdrawn anything yet!
I have an S&S ISA with them and like the lack of fees. The app is less straightforward but more informative than HL's. I like it enough to open more ISAs with T212.
Note the 5.1% isn't entirely risk free, they use money markets to obtain that return. I've signed up to it for interest on my uninvested cash balances. You should check whether or not it's covered by the FSCS scheme - from memory I don't think it is.
anybody use the trading212 app and can recommend or advise against?
not looking to invest, just put a bit of money form an expired savings account somewhere earning a bit of interest.
The headline rate is 5.1% and wondered if this is accurate
I considered this last week and looked at their reviews which were dreadful, so decided against.
Thank you. May I ask if you decided on an alternative place for your investment?
I've had some instant access savings in Cynergy for years and never had an issue. Currently paying 4.6%, but a better rate/as good as anywhere else, apart from 212. I've stuck with them after the rate recently dropped from 4.8% to 4.6%.
The bad 212 reviews were mainly about people being unable to withdraw and then complaints not dealt with speedily/they are unable to contact/don't reply. Here they are on Trustpilot. I read the first 2 pages and there were enough complaints to put me off, as I've had no issues with Cynergy. https://uk.trustpilot.com/review/trading212.com?page=2
NB An educated guess says 212 won't be paying 5.1% for much longer unless they are desperate for cash. Why would you pay 0.5% above the next highest payer, when you could shave at least 0.25% off and still be the top payer? (I may be wrong).
I have an S&S ISA with them and like the lack of fees. The app is less straightforward but more informative than HL's. I like it enough to open more ISAs with T212.
Note the 5.1% isn't entirely risk free, they use money markets to obtain that return. I've signed up to it for interest on my uninvested cash balances. You should check whether or not it's covered by the FSCS scheme - from memory I don't think it is.
For the ISA it shows you which banks hold your money (mine is split over 3, assume same for everyone) it is they that are giving the FSCS protection.
Trading 212 is predominantly an investment platform – and its new 5.1% cash ISA* is clearly a loss-leading means of building a customer base for the investment side of the business. While there’s nothing wrong with this (it’s a regular cash ISA and your savings won’t be invested), it’s important to not be drawn in to opening other Trading 212 products without understanding what you’re doing. Investing comes with risk, as the value of your investment can go down as well as up.
If you just want the savings product, ensure you click ‘Trading 212 Cash ISA’ when you go to open the account. It offers a few different accounts, including a stocks and shares ISA, which is a very different product (and which we highlight in our stocks and shares ISA page).
About FSCS protection for this account
The cash ISA has full FSCS protection up to £85,000, however as Trading 212 isn’t a bank, it works slightly differently. When you deposit money, the funds are held in a ‘client money account’, separate from Trading 212’s own money. Trading 212 currently holds these with Barclays, NatWest and JP Morgan – this means YOUR money could be with one (or more) of these banks. These are all fully regulated UK banks and are therefore covered by the FSCS.
If you've existing savings with any of them, the FSCS only covers up to £85,000 per person, per financial institution – in other words, the total protection for all accounts held with a particular bank is capped at £85,000.
Just note that if you have significant savings with one or more of the above banks (or Chase which is owned by JP Morgan, or Ulster Bank which is owned by NatWest Group), you could be exceeding the £85,000 protection limit – and your savings could be at risk if your bank goes bust.
anybody use the trading212 app and can recommend or advise against?
not looking to invest, just put a bit of money form an expired savings account somewhere earning a bit of interest.
The headline rate is 5.1% and wondered if this is accurate
I considered this last week and looked at their reviews which were dreadful, so decided against.
Thank you. May I ask if you decided on an alternative place for your investment?
I've had some instant access savings in Cynergy for years and never had an issue. Currently paying 4.6%, but a better rate/as good as anywhere else, apart from 212. I've stuck with them after the rate recently dropped from 4.8% to 4.6%.
The bad 212 reviews were mainly about people being unable to withdraw and then complaints not dealt with speedily/they are unable to contact/don't reply. Here they are on Trustpilot. I read the first 2 pages and there were enough complaints to put me off, as I've had no issues with Cynergy. https://uk.trustpilot.com/review/trading212.com?page=2
NB An educated guess says 212 won't be paying 5.1% for much longer unless they are desperate for cash. Why would you pay 0.5% above the next highest payer, when you could shave at least 0.25% off and still be the top payer? (I may be wrong).
Moneybox pays 5.12% but not a flexible ISA, interest annually. Competition.
Comments
cafctom said: My mum and her siblings had to come to come up with over £300k back in 2001 to part settle my grandads estates IHT bill before they would release probate. Not sure if the grants are new, as don't recall it at the time although there wouldn't have been the cash to draw on anyway.
In your case you could have simply put the money in a non-interest bearing account if all you are doing is avoiding any growth being part of your Estate.
I'm never convinced these trusts will work to avoid the care home fee's in most instances as can easily be challenged.
Also are they not akin to offshore trusts we bemoan the rich having to avoid tax?
What would happen to the price if anything happened to Elon?
https://www.ft.com/content/b49d53e4-631a-402f-9dc1-d22f708f97fe
Good background in this FT piece.
Calling it a meme stock would be unfair but there is definitely a cult of personality surrounding Musk that has put Tesla where it is in terms of share value. I suppose the key question is if that translates into sales.
Personally, I feel like the Chinese will eventually conquer the EV market and we are pissing into the wind trying to stop them.
not looking to invest, just put a bit of money form an expired savings account somewhere earning a bit of interest.
The headline rate is 5.1% and wondered if this is accurate
So far so good and have found the App works fine although not tried to transfer or draw any money out so can't comment on that aspect.
Very annoying
I like it enough to open more ISAs with T212.
Note the 5.1% isn't entirely risk free, they use money markets to obtain that return. I've signed up to it for interest on my uninvested cash balances. You should check whether or not it's covered by the FSCS scheme - from memory I don't think it is.
Currently paying 4.6%, but a better rate/as good as anywhere else, apart from 212.
I've stuck with them after the rate recently dropped from 4.8% to 4.6%.
The bad 212 reviews were mainly about people being unable to withdraw and then complaints not dealt with speedily/they are unable to contact/don't reply.
Here they are on Trustpilot. I read the first 2 pages and there were enough complaints to put me off, as I've had no issues with Cynergy.
https://uk.trustpilot.com/review/trading212.com?page=2
NB An educated guess says 212 won't be paying 5.1% for much longer unless they are desperate for cash. Why would you pay 0.5% above the next highest payer, when you could shave at least 0.25% off and still be the top payer? (I may be wrong).
Trading 212 is predominantly an investment platform – and its new 5.1% cash ISA* is clearly a loss-leading means of building a customer base for the investment side of the business. While there’s nothing wrong with this (it’s a regular cash ISA and your savings won’t be invested), it’s important to not be drawn in to opening other Trading 212 products without understanding what you’re doing. Investing comes with risk, as the value of your investment can go down as well as up.
If you just want the savings product, ensure you click ‘Trading 212 Cash ISA’ when you go to open the account. It offers a few different accounts, including a stocks and shares ISA, which is a very different product (and which we highlight in our stocks and shares ISA page).
About FSCS protection for this account
The cash ISA has full FSCS protection up to £85,000, however as Trading 212 isn’t a bank, it works slightly differently. When you deposit money, the funds are held in a ‘client money account’, separate from Trading 212’s own money. Trading 212 currently holds these with Barclays, NatWest and JP Morgan – this means YOUR money could be with one (or more) of these banks. These are all fully regulated UK banks and are therefore covered by the FSCS.
If you've existing savings with any of them, the FSCS only covers up to £85,000 per person, per financial institution – in other words, the total protection for all accounts held with a particular bank is capped at £85,000.
Just note that if you have significant savings with one or more of the above banks (or Chase which is owned by JP Morgan, or Ulster Bank which is owned by NatWest Group), you could be exceeding the £85,000 protection limit – and your savings could be at risk if your bank goes bust.
Friday we had the employer NI increase.
Yesterday it was the bus cap increase.
Today it is minimum wage increase.
No bloody point having a Budget - just announce everything to the press over a week or two.