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£40k to invest - but it needs to be accesible
Mandymoney
Posts: 4 Newbie
Hi all
A long time member of the forums but have registered under an alias as many friends know my other persona and I want to keep this under my hat from them.
My lovely Mum and Dad have phoned this afternoon and said that they have an endowment due to mature and would like to give OH and I £40k :T:T. It will come to me eventually in their Will but they said they would like to gift us the money now so we can get some use out of it when we need it (desperate for new windows and a general house refurb) rather than hang on til they're gone.
To say I as gobsmacked is an understatement and I realise that there are potential tax implications that I need to investigate but in the short term we will need to pay the cheque they are going to give us into an account next month. The money will be used - as I said party on refurbing house and partly on paying off credit cards earlier than we have bargained for - so needs to be accessible but will be going out in dribs and drabs as and when we purchase items. Any advice about the best place to put it ? Still reeling from the shock to be honest
A long time member of the forums but have registered under an alias as many friends know my other persona and I want to keep this under my hat from them.
My lovely Mum and Dad have phoned this afternoon and said that they have an endowment due to mature and would like to give OH and I £40k :T:T. It will come to me eventually in their Will but they said they would like to gift us the money now so we can get some use out of it when we need it (desperate for new windows and a general house refurb) rather than hang on til they're gone.
To say I as gobsmacked is an understatement and I realise that there are potential tax implications that I need to investigate but in the short term we will need to pay the cheque they are going to give us into an account next month. The money will be used - as I said party on refurbing house and partly on paying off credit cards earlier than we have bargained for - so needs to be accessible but will be going out in dribs and drabs as and when we purchase items. Any advice about the best place to put it ? Still reeling from the shock to be honest
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Comments
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How big is their estate? It will have to be quite big for there to be tax issues.0
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http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm
No immediate liability and indeed there may never be any.
If it needs to be accessible then you'll need instant ( or at all events short notice) access.
You could browse here http://www.thisismoney.co.uk/money/saving/article-2017593/BEST-SAVINGS-RATES-TABLES-Full-list-This-Moneys-best-buy-tables.html0 -
How big is their estate? It will have to be quite big for there to be tax issues.
I don't know to be honest. They have a house, which will be split between me and my brother mainly with some money left to their grandchildren (4 of them) and some savings / investments however this does not take into consideration needing to realise capital for nursing fees etc. in the future. I was thinking more of there being possible tax implications for me - would I have to declare it for example on a tax return?0 -
Mandymoney wrote: »I don't know to be honest. They have a house, which will be split between me and my brother mainly with some money left to their grandchildren (4 of them) and some savings / investments however this does not take into consideration needing to realise capital for nursing fees etc. in the future. I was thinking more of there being possible tax implications for me - would I have to declare it for example on a tax return?
there is no tax on cash gifts in the UK
the only tax implication is Inheritance tax.
If they die within 7 years then the value of the gifts are added back to the estate and then IHT is applied to the value of the estate plus the 7 year gifts.
If they are in good health then this may not be an issue and if their estate is less than 650,000 (assuming a married couple) then no tax is payable.0 -
Be careful. It seems like a lot of money, but you only need spend a little more than usual every month and it will be gone in no time.
Make sure you have to think long and hard before drawing down on this money. Don't start spending more. After paying off your CC bills, why not switch to paying 100% (yes!) off by DD every month?
This is a great opportunity so make the best of it.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
That's great news for you.Mandymoney wrote: »
The money will be used - as I said party on refurbing house and partly on paying off credit cards earlier than we have bargained for - so needs to be accessible but will be going out in dribs and drabs as and when we purchase items. Any advice about the best place to put it ? Still reeling from the shock to be honest
I'd be wary about spending too much on a party, you may be best to save as much as you need for the future and not spend it on covering current bills as per the advice already.
Pretty much any investments you take out will be accessible, you should aim for them to be 5 years plus but if you needed access beforehand with most S&S ISAs you can get your money if you want to sell. If you both use your ISA allowances you can put in up to £40k by using allowances for this tax year and then in April the next one too. If you're not married then you may want to consider whos name the money is put in though.Remember the saying: if it looks too good to be true it almost certainly is.0 -
I'd be wary about spending too much on a party
Typo - should read 'partly'
Pretty much any investments you take out will be accessible, you should aim for them to be 5 years plus but if you needed access beforehand with most S&S ISAs you can get your money if you want to sell. If you both use your ISA allowances you can put in up to £40k by using allowances for this tax year and then in April the next one too. If you're not married then you may want to consider whos name the money is put in though.
Been married to OH for 24 years - always worked on a joint money policy, it's just up until now we've shared debt
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Pretty much any investments you take out will be accessible, you should aim for them to be 5 years plus but if you needed access beforehand with most S&S ISAs you can get your money if you want to sell. If you both use your ISA allowances you can put in up to £40k by using allowances for this tax year and then in April the next one too.
In spite of the title of the thread, it sounds to me as if they are not looking for investments, but for cash savings accounts. So cash ISA might be an idea for some of it, but probably not stocks and shares ISA.0 -
Mandymoney wrote: »Typo - should read 'partly'
Best. Typo. Ever.it's just up until now we've shared debt
Unless one spouse is an irredeemable spendthrift, I've always had the view that everything should be pooled. Myself + spouse don't differentiate at all other than for tax purposes.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »Best. Typo. Ever.
Unless one spouse is an irredeemable spendthrift, I've always had the view that everything should be pooled. Myself + spouse don't differentiate at all other than for tax purposes.
Thank you We are both quite good with money but life has always got in the way *sigh*. OH's work has been rather disjointed - we seem to have gone through him being made redundant every 2-3 years for the past 15 years and each time he has been out of work for 4-6 months so any redundancy pay has been used up in living costs. He is earning what he was about 10 years ago so we haven't seen a salary rise, although he is still working as hard! Add into the mix 3 children and somehow we never seem to get on top of everything. This will give us the 'boost' we need to get our heads properly above water and do all those things round the house that need attention.sleepless_saver wrote: »In spite of the title of the thread, it sounds to me as if they are not looking for investments, but for cash savings accounts. So cash ISA might be an idea for some of it, but probably not stocks and shares ISA.
You are right. They are giving us this as they know that although we manage day to day, there never seems to be a way to do those big projects. We need some new windows, to replace a living room and dining room carpet and have some leaking issues in a bathroom - this will completely change our lives. I cannot believe how lucky we are 0
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