Investment & Investing

That’s great thanks! Once you had the basics did you get someone to look at your ‘situation’ and give some advice?

https://ukpersonal.finance/recommended-resources/

Thanks! That’s a great reference guide

I want to set up an Ltd for an incoming consultancy project, and also wind up another bike focused Ltd that has investors. Is there a forum-approved (no liability presumed) accounting platform/app for that?

US debt ceiling. Just like with their govt. budget, there’s always drama and brinkmanship (extortion?). Given the madness of the past 10 years, I can’t help but wonder if this year will be the year they default and the system breaks.

I'm a daily user on here but posting (even more) anonymously because the topic is a bit sensitive.
I'm about to come to the end of my first five year mortgage term. In the time, my dad has passed away and my mum has been left with a lump sum from his pension as he died before pensionable age (in lieu of a monthly pension if he had died at pensionable age).
She gets very stressed about having money in the bank and being defrauded. She also terrified of losing any money, so won't invest it.
I would like to suggest that she buys my house at the end of my mortgage term and I then pay her the interest that I would have been paying the bank.
What are the pitfalls of this? Are there any financial things (taxes or whatever) that I should be aware of?
Thanks in advance

Best to speak to financial advisor to make sure your doing it best way

Ps. No shame in that situation! Sorry for your loss.

I think talking to a financial advisor would be a good idea too. I would have thought in your situation though, it might be best for her to lend you the money to pay it off, then you repay with interest. I think if she buys the house and you live in it, then you slowly buy it back, it over complicates things in terms of who owns what legally. If you pay her interest, I think she'd probably need to declare it and pay tax on it as an income (as she would if it was in a bank).

Stamp duty is the obvious one. Also she's going to end up with money in the bank again as you pay interest (and possibly harder to keep track of).

Depending on what else she is receiving those "interest" payments may also be taxable.

Don't know if there are potential IHT implications, nothing springs immediately to mind but I wouldn't be surprised if there were.

Would also need to be solid on who is responsible for upkeep, etc. You'd really want it all in writing which may be stressful.

It's not a terrible idea on paper. Although something like putting the money in a fixed interest, restricted access saving account may be less stressful.

Sorry to hear about your dad.

In any interim period your mum might want to consider using premium bonds or similar ns&I products which are guaranteed beyond normal savings https://www.nsandi.com/get-to-know-us/security/protect-your-money
As a way not to have money sitting in her account and indeed generating some risk free return.

Depending on her situation she might also want to consider topping up/investing in a pension product some of which could be very low risk.
Money saving expert always great for parent reassurance (in my experience). A good starting point also to base some finance/internet literacy discussions also, including having some key details written down and also reassurance that you are happy to help her understand stuff.

As others have said you probably want an expert to advise, but if she's worried about losing it, NS&I/Premium Bonds is the safest option I believe - 100% government guarantee

Edit: snap - too slow

Thanks all!
Premium bonds is max £50k as far as I know.
Max NS&I rate is curently 4% as far as I can see. I could give her more than that and still have a cheaper mortgage/not be at the mercy of the banks.
It's all food for thought.
To clarify - I meant that she loans me the money - she's in effect my lender.
Any further thoughts very much welcome!

It's probably easier from a tax point of view if she gives you the money and then you give her back some money on a monthly basis. Cash gifts like this are not taxable as long as the person giving them lives 7 years from the date of the gift. If the giver dies within 7 years of the gift then it will depend on the size of the estate but tax may be payable by the estate for the gift.

You then just have a verbal agreement between the 2 of you that you are giving her cash on a regular basis.

By cash I mean money, it doesn't have to actually be bank notes!

UK gilts would have a similar risk profile, I guess, possibly even better.

Investing in a gilt based trust that pays an annuity / lump sum balloon would be about as risk-free as you could get.

Tax would be on the interest earned (IANAA though)

Financial adviser time.

Sorry for your loss.

Probably not a great idea for her to buy your house - as others have said there could be stamp duty, inheritance tax and capital gains tax implications.

Your mum sounds like she needs help to invest the lump sum wisely for her future. Obviously she could pay for an ifa. Or she might be able to get a session with someone at Pension Wise, which is a government funded operation designed to help people make the right decisions regarding pensions.

Airhead's suggestion is probably the most sensible. Pointless her having cash in the bank earning fuck all whilst you pay 5.5% on your mortgage.

Tax implications are minimal; seven year thing sounds right, also the (total gifted) amount has to be beyond the inheritance tax threshold IIRC to attract the taxation in the first place. Both can quickly be sense checked without involving a third party.

monzo doing 3.4% instant access saver now. higher % than premium bonds. pretty decent if holding money for a particular purpose

Chip are doing the same, and chase is also pretty high. If worried about deposit protection then could aim to have 3 of these accounts and money spread out.

Beginner investment question - I may be about to answer this myself but am unsure; if you own shares in a company can a 3rd party buy them off you without you having a say even if it is just a shareholder vote?

I've just had this happen and was a bit surprised as I would rather not have sold my shares.

Possible solutions off the top of my head:
1 - when I say "own" I mean purchased on Trading212 (real money investing). Is it actually that you don't own the shares on T212, they do so can make the decision?

2 - or is it if you're a tiny minority shareholder & the buyer was already a majority shareholder, they essentially did the vote & voted it through themselves?

if you own shares in a company can a 3rd party buy them off you without you having a say even if it is just a shareholder vote?

yes. pretty standard. will have to get approval from the board and subsequent shareholder majority vote regarding the purchase price

Thanks, I guess as the purchaser already had a substantial share they could vote it through without it going to the other shareholders to vote.

Nice to make a profit but annoying not to have the shares anymore!

Another £25 PB win. What a time to be alive.

Can a LTD company issue unequal dividends to it's shareholders?

I think it needs to have different share classes to do so. Otherwise i think a shareholder could forfeit dividends if they just decide they don’t want them?

There might be complications if a waiver etc benefits one SH in some other way (e.g. tax reasons)

Ah great, thank you. That’s helped focus my failing google searches.