WWYD: financial decisions as single parent

[Bunny44]

With the tax trap being between £100k and £125k, I earn in the middle and as a single parent of a young child and who has no CMS or support from ex, I'm trying to make the most for my family by keeping under the £100k mark to get free childcare hours and tax free childcare but also maximising other tax-free revenue streams. Could someone tell me if I've missed anything:

Paying into pension to take income under £100k
Rent a room scheme: £7500
Other savings allowance: up to £500
Maxing out ISA allowance

There is the capital gain allowance but I'm trying to think how I might use that?

I've been given the option of RSU grants through my new job but since they're treated as income and they're treated as worth around £10,000 per year and I'd have to pay tax up front and pay an extra £10,000 per year into my pension to keep below the childcare limit... not sure if I can afford to do that particularly as I'm trying to save what I can to move house.

Going to try and get tax and financial advice but just wondered if there's anyone with any thoughts or tips?

Premium bonds?

Does your company offer anything else that might be useful? Like an electric car repaid via salary sacrifice? Or can you buy more holiday?

You pay tax when RSUs vest (when you receive them) not when granted, so you could just put straight into your pension. I wouldn't reject them on this basis as it will at least boost your pot.

Sorry when I say "when you receive them" I mean when you become eligible for the shares, not when you are granted them.

@TheOneWithUnagi Some have vested already as I started a while ago and they vest every month. But they're share options so aren't actually worth anything until you sell them or the company goes public. However I'd have to pay tax on their fair market value straight away and the fair market value would count as roughly £10k a year from vesting for tax purposes. I can't put it in my pension but rather id have to put another £10k into my pension not to lose the free childcare as this counts as income for tax purposes. That's difficult as I don't know if the company will ever IPO so the value is quite arbitrary and secondly I need actual money now. On the otherhand they may well be worth a lot at some point.

I already sunk £15k in a previous company's share options when I left some years back then looks like nothing will come of it.

@PropertyGeek525 thank you yes this looks like a good option.

They do the cycle to work scheme but no other salary sacrifice schemes that I know of.

Do you get a bonus? Worth putting this or some into pension as well if it keeps you under £100k. Premium bonds and ISA are also tax free.
Careful to count any taxable benefits you get as well (car, medical)

I will get a spot bonus due to come next year so that will have to go in my pension. Yes I'm also budgeting for benefits that go on my P11D such as health insurance.

Sounds like you're all over this and tracking it. I think that's the key, having it all tracked. I didn't do this 2 years ago and paid loads of extra tax. The next year, I managed it really well and kept under 100k.

Someone said you can retrospectively put extra in your pension if needed - will need to check that. The main thing is I'm trying to save as much as possible so would rather not put so much in my pension but obviously as many people have mentioned, with a young child in nursery I'd be worse off earning between £100 and £125k than £99.9k so I'm trying to see what revenue streams I can use to earn extra without it counting towards my income amount. I think the bonds are probably the only thing I haven't thought of really.

I'm also making some decisions around property which I've been hesitating about asking here too. @PropertyGeek525 does your wisdom live up to your name around these matters? :-)

You are 💯 wise to keep at 99.9k. I can tell you a little bit about my experience with property, I've bought a few very cheap places with cash. The main thing to look into is should you set anything like this is whether to do it in your name or set up a company ( tax reasons)

@coolcahuna what would be the use case for buying a house with a company? I'm essentially trying to work out whether it's worth hanging onto my current home (small place in central London) and buying a small house to live in where I am now (South West). House prices are high in both locations and even a small place down here I'd be hit with high 2nd home stamp duty. And I'd need 2 mortgages.

I'd keep my place in London as my main home due being higher value and tax reasons. Feels like a lot of factors to consider.

If you buy it in your own name you have to declare the rental income as earnings so this could tip you over the £100k. You'd need to some research but buying in a company could be better tax wise. Yes there is the stamp duty to consider.
I've bought them in my own name as i want to easily transfer them to my children in the next 10 years are so as they are young adults now.