Help with £210k

Albermarle

JGB1955 said:

If you have children, and don't 'need' the money, why not pass it on directly to them now? As long as it's within 2 years of date-of-death you can make a deed of variation to move your inheritance on without fear of IHT.  

My father died last year and I've passed on 2/3 of my inheritance directly to my children.  They can make far better use of it than me.  I can see them enjoy the money that my 'tight a***d' father would never have spent on them and it takes us back down towards tax free IHT levels ourselves.  Win win!

As the OP is still working , another option would be to add to a Sipp/DC pension and get some tax relief .
They could nominate a family member(s) as beneficiaries on their death. Pension pots are not included in IHT calculations.
However of course they would not get the money now but at some ( hopefully distant) point in the future.

steampowered

Are you a higher rate tax payer?

If so, there would be a significant tax benefit to contributing the maximum amount possible (£40k) per year into your pension so long as you do not exceed your lifetime allowance. 


Aside from that, you would want to invest the money for the longer term. Personally I would invest in shares (through a diversified investment fund) rather than starting a lettings business by buying a BTL property - because:
(1) shares have historically outperformed property and that seems likely to continue particularly given the increasing level of regulation in the BTL sector
(2) the costs involved with letting a property (letting agent fees, maintenance costs, ground/rent service charges) are far higher than with shares
(3) BTL is highly taxed (rent is taxed as income; shares you can invest a chunk of it through a S&S ISA to keep it entirely tax free)
(4) it's extra hassle 
But if you want to start a lettings business and have a good business plan for it that's up to you.