Do I have to declare my inheritance?

okerho

My grandmother passed away recently has left me £18000.
My parents want me to put this into premium bonds and a savings account.
Personally I want to buy a few things like a new laptop and a motorbike, maybe even go on hiloday with my friends.
My Dad says that I might need to contact Revenue & Customs and declare the money.
I am 22 years old and a full time student at university.

Do I have to declare this money to anyone?

Also if anyone has any suggestions on how to invest the money that
would be nice too :-)

Linton

Assuming you are not claiming any benefits there is no requirement to declare an inheritance to anyone. There is no tax charged on gifts or inheritances.

Bearing in mind that £18K could be a lot to an 22year old and you may well have need of it in the next few years a savings account is the best option - a good one will almost certainly out-perform premium bonds.

I would suggest that you put any money you wont need in the next year into a fixed term account which will pay better interest.

Lokolo

You don't need £18k for a laptop, a motorbike and holiday. Less than half of that can be used for those things.

Premium Bonds are a waste of money, averaging around 1.8%. A savings account would be useful, first things you should do is open an ISA, then another savings accounts for the rest of the money. Take out the money when you need it.

Assuming the inheritance has been paid already, any tax issues would have already been dealt with by a solicitor.

Rob_192

okerho

You have been given a fantastic gift which could set you up for life if you do the right thing.

Treat this money as a deposit for a future house purchase. Don't spend it! Put the maximum you can in the current year (£5,340) into the best Isa you can find and get the rest in the best higher rate saving account you can find. Next April, get another £5,340 (or whatever next year's allowance is) in the Isa and don't forget to transfer to keep at the best rates.

Buy the cheapest laptop you can find and forget the motorbike and holiday.

This money could see you buying a house years ahead of your piers, don't waste it. I know it's tempting, but just don't spend it.

R

Rob_192

I should just add, the reason you need to get this money in an Isa, is that you will become a taxpayer once you leave Uni (when is that? next year?) You need to get as much in an Isa as soon as you can to minimise the tax once you start earning.

Stompa

Lokolo wrote: »

Premium Bonds are a waste of money, averaging around 1.8%.

Just 1.5% now I'm afraid.

Simon11

What would your grandmother think if the money she gave you was spent on holidays and pointless objects?

She would however be very proud if her money went on her grandson to buy his first house.

I've been given £10k inheritance so far and its gone str8 into the house saving fund. If I wish to go on holiday, I work for it.

Do remember when you 24+ you might want a place of your own and you need a deposit of around £20k++++

Please don't waste it!

For a place to save it

Check out Santander First home saver accounts offering 5%!

thenudeone

Linton wrote: »

Assuming you are not claiming any benefits there is no requirement to declare an inheritance to anyone. There is no tax charged on gifts or inheritances.

I agree that beneficiaries generally don't have to declare gifts or inheritances, I think that's too simplistic a statement to go unchallenged.

For an estate over £5k the executors will need to apply for probate (unless everything was owned jointly and will pass to them)
http://www.direct.gov.uk/en/Governmentcitizensandrights/Death/Preparation/DG_10029799
Depending on the size of the estate and the wording of the will it is possible that the beneficiaries could be liable to pay inheritance tax.

lilac_lady

It would be a good idea to spilit the money - £6000 for spending (not all at once if possible!) and £12000 in savings.

you're young, so enjoy your good fortune, but don't be rash. A safety net of money is a good thing.

PS - don't lend any of it to anyone!

scott_lithgows

Make your holiday a round the world trip,buy the bike when you get back.Buy a house with about 12k of it.