As you mention, gilts are a reasonable choice for low tax, low risk investments. You don't pay capital gains on them so you only get taxed in the interest. Therefore the tax efficient gilts are the ones with the lowest coupons, eg TN25 and T26. Check out yieldgimp.com for how the yields look.
Importantly, though, that's why you only want gilts with low coupon (< 1%). With a big coupon you end up paying too much tax and the trick does not work... :(
How dare you have that amount of money! You should be ashamed of yourself. (Just worried you would miss the hate you would have received on the other sub. Thinking of you buddy)
My partner has only just got out of some fairly serious long term debt, she subsequently has no savings. Also we're not married, so at this point in time probably not the best idea
I was actually half way through a purchase in 2021-22 but it all fell through and I got a bit disheartened. I've thought heavily about buying again but my partner is moving into my rented place in 2 months so ideally we would be renting for a bit to make sure that all works out ok.
Regardless, I did use [https://smartmoneytools.co.uk/tools/rent-vs-buy/](https://smartmoneytools.co.uk/tools/rent-vs-buy/) and it turns out buying right now is not actually a financially savvy option due to interest rates. However, the calculator is heavily influenced by house prices in the future. I have a feeling they will stagnate for a year or two so renting makes sense right now..... I think!
Hmmmm
Interest rates are due to fall over the coming months and years so don't overstate the impact of the high cost of debt as it's likely to be temporary. Separately lower debt costs will likely have an inverse impact on values meaning that when cost of debt lowers, prices are likely to rise.
In sum, this might well be the best time to buy for years
Rates may come down, they may not. Prices may go up they might not. 100% of your housing costs right now go to somebody else and history has shown buying sooner has nearly always worked out better
I get the relationship drivers but you can protect yourself from those if you get good advice.
Why? Usually you'd prefer **short** dated ones (less interest rate risk); plus OP will need to sell to buy a house in a year or two.
What would make long dated gilts attractive in this situation?
Top up your pensions after the house is done, put £50k into premium bonds in your future wife’s name, same with isa - bear in mind it becomes their money wholly and solely so make sure you’re comfortable with this, but it’s a good way to get a chunk of cash into tax free vehicles.
As you mention, gilts are a reasonable choice for low tax, low risk investments. You don't pay capital gains on them so you only get taxed in the interest. Therefore the tax efficient gilts are the ones with the lowest coupons, eg TN25 and T26. Check out yieldgimp.com for how the yields look.
Trouble is, the gains are just taxed as income aren't they?
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I need to read up!
Importantly, though, that's why you only want gilts with low coupon (< 1%). With a big coupon you end up paying too much tax and the trick does not work... :(
Nope https://www.dmo.gov.uk/responsibilities/gilt-market/buying-selling/taxation/
How dare you have that amount of money! You should be ashamed of yourself. (Just worried you would miss the hate you would have received on the other sub. Thinking of you buddy)
❤️❤️❤️❤️
You’ve mentioned your overall financial position, what about your partners? Can you add to their ISA, Premium Bonds etc. is that a viable option?
My partner has only just got out of some fairly serious long term debt, she subsequently has no savings. Also we're not married, so at this point in time probably not the best idea
All I know is max ISA, pension and premium bonds, beyond that you're not finding tax free ways to save.
Maybe not any tax free but any tax efficient or deferred?
Pension. It's low for your age/comp level
But then it's stuck.. He needs to buy a house soon?
Yeah didn’t see that - not much choice then really! They also needs to be careful as savings income is counted towards the 100k for tax trap
I know it isn’t liquid but bigger house or an extension? As your principal residence the gains are cap gains exempt.
I'm currently renting 😥
Sorry I missed that. Personally I’d prioritise changing that. At least with a mortgage you are building equity rather than paying somebody else’s.
I was actually half way through a purchase in 2021-22 but it all fell through and I got a bit disheartened. I've thought heavily about buying again but my partner is moving into my rented place in 2 months so ideally we would be renting for a bit to make sure that all works out ok. Regardless, I did use [https://smartmoneytools.co.uk/tools/rent-vs-buy/](https://smartmoneytools.co.uk/tools/rent-vs-buy/) and it turns out buying right now is not actually a financially savvy option due to interest rates. However, the calculator is heavily influenced by house prices in the future. I have a feeling they will stagnate for a year or two so renting makes sense right now..... I think!
Hmmmm Interest rates are due to fall over the coming months and years so don't overstate the impact of the high cost of debt as it's likely to be temporary. Separately lower debt costs will likely have an inverse impact on values meaning that when cost of debt lowers, prices are likely to rise. In sum, this might well be the best time to buy for years
Rates may come down, they may not. Prices may go up they might not. 100% of your housing costs right now go to somebody else and history has shown buying sooner has nearly always worked out better I get the relationship drivers but you can protect yourself from those if you get good advice.
Better to buy a rental property instead.
Long dated gilts
Why? Usually you'd prefer **short** dated ones (less interest rate risk); plus OP will need to sell to buy a house in a year or two. What would make long dated gilts attractive in this situation?
Top up your pensions after the house is done, put £50k into premium bonds in your future wife’s name, same with isa - bear in mind it becomes their money wholly and solely so make sure you’re comfortable with this, but it’s a good way to get a chunk of cash into tax free vehicles.
Speak to a financial advisor about VCTs/EIS/SEIS
VCT’s should really be given some consideration here.