selling house, dividing capital

cappuccina

my mum has now received the cash from the sale of her house (she now lives abroad with her new partner, I live with my grandparents, my sister lives with her boyfriend). She isn't sure on what is best to do with the cash she now has and has many choices but is aware of the ad/disad of each choice. She has £200k. What do you guys think is best of the following, or do you have any other suggestions:

1) she could invest in a small flat here in the UK that I could live in and pay her a monthly rent and I could also take in a lodger to bring in extra income. However the average price of small 2 bed in our area of London will take up all that cash and more.

2) she could give me and my sister £50k each (which I believe causes tax problems) and invest the other £100k in property where she now lives, to give her a monthly income from renting it out.

your thoughts please....

devils_advocate

This is really too complex a question to be answered on a public forum.

However, the way to ask the right questions to which you need answers is to look at it solely from your Mother's point of view first.

what does she have for her future, eg income pension capital?
future healthcare needs if she lives abroad?
what happens if her current relationship ends/breaks up?

these answers may dicate that she has to keep the cash available to herself.

Only then can she decide how to invest it / give it away. £50k deposited in a bank is more accessible than invested in a buy to let. She may want a guaranteed performance ratehr than a more speculative one (ie how much is she prepared to lose, in order to achieve higher returns?)