Half a million pound inheritance - what to do?!

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I have an inheritance of half a million pounds. I have no idea what to do with it.

I don't need the money to live off and don't want to be tempted by the money to increase my spending. I currently live within my limits but, with three kids, don't save much at myself. We own our house outright.

Basically I want the money to be long-term savings for the kids for university and buying a house etc when the time comes. Also a pension for my husband who is freelance (I have a very good pension through my employer). Oldest child is 13 so the soonest I'd need access to the money is in five years.

The money is currently abroad, most of it in sterling. I want to keep it in sterling because pound is so weak.

I also live abroad, in a third country. My tax status means I don't need to pay tax on money earned outside the country but obviously would pay non-residents taxes wherever the money is saved. Means something like an ISA is out though

What on earth should I do with this money?!

It's currently just been deposited in my account and is just sitting there not earning interest and I feel quite frozen with indecision!
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  • jamesd
    jamesd Posts: 26,103 Forumite
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    What are the tax residences of your children and husband?
  • pettelly
    pettelly Posts: 52 Forumite
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    Same as me. We don't have to declare income in our current country of residence unless earned in the country.
  • richy999
    richy999 Posts: 260 Forumite
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    There seems to be two sides to your query, how to prioritise the allocation of this money to your goals and what is the best way to achieve this based on your current status.

    As you appear to have no debts, consider prioritising your own and your husband’s retirement 1st. If there is anything left after this then put it towards your children’s university and or property funds.

    The only advice I feel able to offer towards how to best achieve the above is to consult a professional for advice as your residency and tax status is not straight forward.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    richy999 wrote: »

    The only advice I feel able to offer towards how to best achieve the above is to consult a professional for advice as your residency and tax status is not straight forward.

    ^^^^^ this.
  • bigadaj
    bigadaj Posts: 11,531 Forumite
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    It would be a lot easier if the OP would give more detail about where they and the money are.

    It's very easy to say get professional advice on a uk board, but uk regulation on financial advice is probably the best in the world, professional advice could be good, indifferent or bad where they are and preservation of capital and value is as important as growth for many people.
  • xylophone
    xylophone Posts: 44,620 Forumite
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    You appear to have been abroad since 2012 - did the children have CTFs?

    You are not a "Crown Servant"?

    Even if not, it could be possible to continue to contribute to them.

    https://www.aegon.co.uk/content/dam/ukpaw/documents/contributions-for-overseas-individuals.pdf may be worth a look.

    The OP can google for IFAs with expertise in her current country of residence and the UK.
  • mike88
    mike88 Posts: 573 Forumite
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    Keeping £500k in a single foreign bank account is madness. Let's hope it doesn't go bust.
    Take my advice at your peril.
  • LXdaddy
    LXdaddy Posts: 693 Forumite
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    Nice problem to have but as already said - your situation is complex so get good professional advice. A set of strangers like us are hardly qualified other than to offer suggestions or encouragement.
  • pettelly
    pettelly Posts: 52 Forumite
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    Yeah, we will be seeking expert advice but I was hoping for some creative ideas! We spoke with one IFA who thought we should invest in off-shore hedge funds but we're not so comfortable with that idea.

    Where we are doesn't matter since we won't invest there (crazy taxes if we do), the point is we're non-resident in the UK which is one place we're comfortable investing.

    Oldest two kids do have CTFs

    It's obviously nice to have the money than not to have it but I'd give it all up in a heartbeat to have my fantastic dad around for longer :(
  • chucknorris
    chucknorris Posts: 10,786 Forumite
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    edited 15 April 2016 at 8:16AM
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    You are a lot younger than me (I'm 58) so you have plenty years ahead of you, enough years to invest in shares, although you mentioned buying a property, that may present a problem, depending when you wanted to access the money, if in less 10 years, I would invest the money for a property purchase in a corporate bond(s), and the rest in shares.

    I'll be selling some of my investment properties soon (2 to 4 years) and I'll be investing the equity in shares. What I like about shares is that the dividend income is taxed at a lower rate then the alternatives. But you would have to be comfortable with seeing the capital value falling occasionally. Obviously you would have to look into what tax you might incur in the country that you reside in (where is that?).
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
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