baz657
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Post by baz657 on Sept 12, 2014 0:46:54 GMT
I'll try to explain this as clearly as I can... My brother and I are executors in our mothers will. During the six(!) years plus since her death we have had to deal with tenants, developers/builders, estate agents, awkward buyers, taxmen and, of course, solicitors. I say we, but as my brother is constantly jetting around the world and his main residence is in Florida, I really mean me. Three and a half months ago we completed the sale of her house. Probate was granted around four or five years ago using the valuation of the house as it was at the time of her death (late August 2008). After a period of renting it out followed by a major refurb the house sold for more than the original valuation and therefore there will be capital gains tax of around £45k to pay. HMRC being their usual selves might have an accurate figure in a couple of weeks. As the CGT wont be payable until January 2016, I'd like to put the £45k somewhere to get more than just a deposit account rate on a high street, not solely in my name but accessible to both my brother and I (just in case....) at the time of payment. We plan to split the interest between the six grandkids, even though they've all done pretty well out of it so far. My first thoughts are something easy like a 50/50 split between RS and Wellesley 12 month bonds - I like and want easy after over six years of dealing with this. Knowing full well that this is a public forum and it's my decision at the end of the day (so I wont come after anyone if it all goes wrong  ) I'm open to further ideas. |
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jimbo
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Post by jimbo on Sept 12, 2014 0:58:54 GMT
Just don't put it into Funding Circle - especially not the property loans. Secondary market liquidity is not what it was this time last year, and the property loans in particular are hard to shift; I presume because of the vast sea of autobid money that looks to have been funnelled into them (wonder what said autobidders will think if they try to sell up in the next six months).
Good luck with sorting out your situation and I'm sorry that you lost your Mother.
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Post by batchoy on Sept 12, 2014 7:17:37 GMT
The two key questions are does your bother have complete buy-in, fully understanding that as well as getting a better rate of return you could loose everything as there is no FSCS coverage for P2P, and between you do you have an additional £45K to cover any shortfalls? If the answer to either of these is 'No' then steer clear and live with the pitiful rates that you will get from a high street deposit account but in the certainty that the money will be there when you need it.
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pikestaff
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Post by pikestaff on Sept 12, 2014 7:55:53 GMT
I agree with batchoy's first question. The second is over-conservative in my view.
If you and your brother are the residuary beneficiaries, as well as being the executors, then there is nothing at all to worry about provided your brother does fully understand and buy in. If there are other residuary beneficiaries, who could lose out, then yes you owe them a duty of care. But I do not think it would be a breach of that duty to go for the higher yield provided that you understand what you are doing.
For some years I have been a trustee of a small family trust set up for two children (not my own), with a similar duty of care. The trust has been invested in a mix of investments including equities and fixed interest (including fixed rate prefs and ZDPs), all of which have risk, with only a small amount of cash to cover immediate needs. As the trust approches the end of its life we have been switching out of equities and longer-dated fixed interest in order to reduce volatiity. Some of the proceeds have been put into cash deposits, but we have felt it appropriate to put some into RS as well.
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Post by batchoy on Sept 12, 2014 8:25:53 GMT
I agree with batchoy's first question. The second is over-conservative in my view. If you and your brother are the residuary beneficiaries, as well as being the executors, then there is nothing at all to worry about provided your brother does fully understand and buy in. If there are other residuary beneficiaries, who could lose out, then yes you owe them a duty of care. But I do not think it would be a breach of that duty to go for the higher yield provided that you understand what you are doing. The reasoning behind my conservatism is that the OP states that the ultimate use of the capital is to settle CGT which will be due to HMRC in 2016 with the interest earned going to other beneficiaries, and HMRC aren't as forgiving as other the beneficiaries might be. I am also the primary trustee of a family trust and have that duty of care. In order to get the returns on the trust's funds they are invested across a wide portfolio of products including a small portion in P2P/P2B investments. Over the years that I have managed the trusts funds it has been a case of winning some and loosing some but overall maintaining the growth of the trust to above inflation (after tax), however in the OP's case since the capital will become due to HMRC on a specific date he and his brother need to have a contingency which in the worst case scenario means being able to find the full £45k from another source.
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baz657
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Post by baz657 on Sept 12, 2014 9:37:04 GMT
Thanks for the input so far. Yes we are both aware of the risks batchoy & pikestaff, both potential losses and our personal liability to pay HMRC if it all does go horribly wrong. Both RS and Wellesley seem to have a safety net and I want an investment where we can deposit and forget about it for a year. I'd be back after a year asking about monthly accounts  Any interest we make would be a bonus as far as the estate is concerned - my brother and I are the largest beneficiaries of the will yet we're planning to give all the interest to our offspring. The solicitors, who have already been holding and seem not to want to let go of the money suggested they "safely" keep hold of the CGT until payment becomes due - I bet they would! I feel they have made enough out of this already. I did consider FC property for all of about three seconds and then saw sense, but thanks anyway jimboIt may end up that we just stick it into a high street account but I want to look at possible alternatives first. |
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markr
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Post by markr on Sept 12, 2014 10:43:30 GMT
Something to consider is that between you you could get 40k of it into a Santander 1-2-3 account each, and you may be able to open a joint one too, 3% with instant access and FSCS protection. You'll need to set up the minimum direct debits and monthly deposits to qualify (choose the direct debits to get enough cashback to cover the £2 monthly fee).
For P2P, would it be possible to offset any losses against the capital gains tax you owe? If so, you could go gung-ho and invest the lot in FC C- loans knowing that any defaults would reduce the tax bill anyway?
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pikestaff
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Post by pikestaff on Sept 12, 2014 11:38:02 GMT
You should check the Ts and Cs before going for anything like the Santander account. Most high interest current accounts are not open to trusts and estates.
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baz657
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Post by baz657 on Sept 15, 2014 8:39:30 GMT
Something to consider is that between you you could get 40k of it into a Santander 1-2-3 account each, and you may be able to open a joint one too, 3% with instant access and FSCS protection. You'll need to set up the minimum direct debits and monthly deposits to qualify (choose the direct debits to get enough cashback to cover the £2 monthly fee). For P2P, would it be possible to offset any losses against the capital gains tax you owe? If so, you could go gung-ho and invest the lot in FC C- loans knowing that any defaults would reduce the tax bill anyway? I've looked and can only see a rate of 1.4% (looks like it changed on 2nd September) on the 1 Year Fixed Rate Bond, unless that isn't the account you mean. That seems to be around the best rate for high street outfits.
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Post by batchoy on Sept 15, 2014 9:23:48 GMT
Something to consider is that between you you could get 40k of it into a Santander 1-2-3 account each, and you may be able to open a joint one too, 3% with instant access and FSCS protection. You'll need to set up the minimum direct debits and monthly deposits to qualify (choose the direct debits to get enough cashback to cover the £2 monthly fee). For P2P, would it be possible to offset any losses against the capital gains tax you owe? If so, you could go gung-ho and invest the lot in FC C- loans knowing that any defaults would reduce the tax bill anyway? I've looked and can only see a rate of 1.4% (looks like it changed on 2nd September) on the 1 Year Fixed Rate Bond, unless that isn't the account you mean. That seems to be around the best rate for high street outfits. The account being referenced is the Santander 1-2-3 current account which pays 3% on balances of £2000-£20,000 and which requires monthly deposits of £500 and two monthly direct debits. With you having one account and your brother having another, you basically shuffle the money between the two using two direct debits each and thus each of you accrues 3% on £20k or in total 3% on £40k of the £45k. If you have three of you and you had three accounts you could get 3% on the whole of the £45k. However as pikestaff noted it is very much dependent on whose money it is as there are restrictions on executors and trusts in opening certain types of accounts which you need to check for in the Ts&Cs
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baz657
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Post by baz657 on Sept 15, 2014 10:11:57 GMT
We don't really want an account that you have to think about - ideally just shove it in and take it out a year later.
Who would have thought it was so difficult to choose?
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markr
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Post by markr on Sept 15, 2014 12:19:12 GMT
The account being referenced is the Santander 1-2-3 current account which pays 3% on balances of £2000-£20,000 and which requires monthly deposits of £500 and two monthly direct debits. With you having one account and your brother having another, you basically shuffle the money between the two using two direct debits each and thus each of you accrues 3% on £20k or in total 3% on £40k of the £45k. If you have three of you and you had three accounts you could get 3% on the whole of the £45k. However as pikestaff noted it is very much dependent on whose money it is as there are restrictions on executors and trusts in opening certain types of accounts which you need to check for in the Ts&Cs That's the one, but I must admit I hadn't thought about moving the money between the accounts. I'd considered that the account would be used like I use mine, essentially move about £500 worth of direct debits from your existing account into the 1-2-3 account, then set up a Standing Order to move £500 each month between your existing account and the 1-2-3 account. The best DDs to move are those for utility bills because the account also pays cashback on these, but these are not usually fixed so some account management may be required to keep the balance close to, but not over, £20000.
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Post by westonkevRS on Sept 24, 2014 6:57:14 GMT
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Post by captainconfident on Sept 25, 2014 9:27:20 GMT
Tesco bank one year fixed rate saver 1.85%
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Post by GSV3MIaC on Sept 25, 2014 12:59:25 GMT
Well I hope Tesco are better than Sainsburys .. my partner had a Sainsbury account which she wanted to close, and if took >2 months, for reasons we don't have enough life left to go into right now. The rates were not bad, but the hassle was unbelieveable.
Aren't Tesco the ones who misplaced the off quarter billion last week?
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) I'm open to further ideas.
