Older finance agreements

[Kingsfarm]

I’ve been looking in for a while but today have registered so hello.

I was just after people’s thoughts really. Prior to the interest rate rises I bought a few items of equipment and put them on finance which as it now turns out was extremely good interest rates. We’ve had a very good year farm wise and looking at some healthy profits and I’m wondering if settling these finance agreements would be a good use of our profits whilst also reducing the next tax years bill because I’ve more outgoing?
These interest rates are around the 2.2% mark so a lot cheaper than todays rates. I can afford the monthly payments without issue and all the equipment hasn’t really lost any value looking at current prices so I’m in a good place but we’ve got the cash so should I settle them all?
I don’t need to buy anything else so won’t be starting any new finance agreements up within the next couple of years either. Until I get the settlement offers I won’t know for sure but I think they’ll in total around £35,000.

 

[quavers]

has your account not already used your machinery purchases for tax relief ? so the interest being paid is also tax relief , personally its cheap borrowing so put the money into a high interest account for a rainy if nothing is needed for the farm

 

[Kidds]

Can't think of a reason to pay off a 2% loan when you can get 5% in a no risk investment with that money.

 

[Clive]

Can't think of a reason to pay off a 2% loan when you can get 5% in a no risk investment with that money.

not to mention that the interest is being paid by the tax man as deductible

 

[Enry]

not to mention that the interest is being paid by the tax man as deductible

who will also want his cut of the 5% though....

 

[Enry]

I’ve been looking in for a while but today have registered so hello.

I was just after people’s thoughts really. Prior to the interest rate rises I bought a few items of equipment and put them on finance which as it now turns out was extremely good interest rates. We’ve had a very good year farm wise and looking at some healthy profits and I’m wondering if settling these finance agreements would be a good use of our profits whilst also reducing the next tax years bill because I’ve more outgoing?
These interest rates are around the 2.2% mark so a lot cheaper than todays rates. I can afford the monthly payments without issue and all the equipment hasn’t really lost any value looking at current prices so I’m in a good place but we’ve got the cash so should I settle them all?
I don’t need to buy anything else so won’t be starting any new finance agreements up within the next couple of years either. Until I get the settlement offers I won’t know for sure but I think they’ll in total around £35,000.

If they are on HP you will have claimed the tax relief at the start so no benefit paying off. Stick it on deposit at 5% as suggested and enjoy the proceeds

 

[daveydiesel1]

If they are on HP you will have claimed the tax relief at the start so no benefit paying off. Stick it on deposit at 5% as suggested and enjoy the proceeds

Or stick it on the s and p 500 with an average return of around 10%

 

[Johnnyboxer]

who will also want his cut of the 5% though....

ISA

 

[farmgineer]

I'd definitely put it in an ISA, I have the same with our mortgage. Fixed at 2% for 10 years, so I'm putting the extra I have into the best ISA I can find at the time, getting 4.5% tax free. You make interest on someone else's money, the same way the fat cats do... Just nice it's me for a change

 

[Tubbylew]

Buy some cattle.... go on, you know you want too!