The Lemon Fool

Early next year I'll be putting my property on the market and expect to obtain £300k equity from the sale.
In the absence of finding a timely suitable property in my chosen area I'm okay with renting for a year or so until I do.
I'm thinking along the lines of placing the equity in a treasury bond to provide a cgt free return to offset some of the cost of rent. Something like TG25 if the proceeds land by say June next year.
I'd welcome any advice on alternatives or caveats on this plan.

Certainly a consideration but you might need to review it closer to the date as "things change".

Dicky99 wrote:I'd welcome any advice on alternatives or caveats on this plan.

You might get a higher return on one year deposits. These may have a some disadvantages with tax on the interest, inability to withdraw the money should you find a suitable property and a need to have regard to FSCS limits.

monabri wrote:Certainly a consideration but you might need to review it closer to the date as "things change".

Very true. Just thinking ahead but I see that if it were today even after paying income tax there's an NS&I 1 year fixed bond that would yield a better return of 4.96%
This is where I need some advise though because presumably if circumstances changed and I had to access that money before the year is up presumably the NS&I return would be entirely forfeited but the gilt may still provide a roughly pro rata return as it's price moves closer to par.

Dicky99 wrote: presumably if circumstances changed and I had to access that money before the year is up presumably the NS&I return would be entirely forfeited but the gilt may still provide a roughly pro rata return as it's price moves closer to par.

You would need to check the early withdrawal conditions of any one year deposit. TG25 will edge up to par as June 2025 approachs. How rapidly it does this will depend on short term interest rates at the time. A current price is 93.60 and the coupon is 5/8%