25K gift - what to do with it

LeShark

Hi 
I’ll be receiving around 25k next week as part of the sale of my grandparents house who have now passed away.
I’m 42. Apart from paying off any debts, is there any advice as to what I should do with the money?
It’s not classed as inheritance so I’m assuming I don’t need to inform HMRC?
Thank you for any advice

Alice_Holt

Pay debts,
Create an emergency fund,
Increase pension contributions,
Donate to a charity of your choice,
Deposit for a house,
S & S ISA for long-term growth,
Fund a professional qualification to increase your human capital,
Spend it on a world trip,
etc, etc, etc, etc, etc, etc

Entirely dependent on your personal and financial circumstances (which you haven't disclosed).

tacpot12

Some great ideas for Alice_Holt. If you have a mortgage, consider paying off some of it, so you can reduce the mortgage term.  This isn't as financially beneficial as it used to be now that interest rates are so low, but if you owe less than £25K and can clear the mortgage, it can be very reassuring to know that your house can no longer be repossessed.

Thrugelmir

Use unexpected windfalls to clear debts. Then you won't simply fritter the money away. Gives you a springboard from which to build for the future. 

MX5huggy

Put it in a pension, depending on your current salary this might take 2 years. £25k Today should double in 20years you could retire 2 years earlier. 

Albermarle

It’s not classed as inheritance so I’m assuming I don’t need to inform HMRC?

Well it sounds like an inheritance to me !

I guess what you mean is that your grandparents estate was not big enough to mean inheritance tax had to be paid?

In any case Inheritance tax is taken out of the estate before funds are distributed to beneficiaries.

So would be nothing for you to declare to HMRC in either case. 

As others have said with so little info about your circumstances it is difficult to comment on what you might be best to do with the money.

pixiebel81

Albermarle said:

It’s not classed as inheritance so I’m assuming I don’t need to inform HMRC?

Well it sounds like an inheritance to me !

I guess what you mean is that your grandparents estate was not big enough to mean inheritance tax had to be paid?

In any case Inheritance tax is taken out of the estate before funds are distributed to beneficiaries.

So would be nothing for you to declare to HMRC in either case. 

As others have said with so little info about your circumstances it is difficult to comment on what you might be best to do with the money.

Not necessarily, the house may have been left to the grandparents' children (OP's parent/aunts/uncles) who are selling and then splitting the proceeds between the grandchildren (OP/siblings/cousins).

If OP has no debt then save half and spend half. For the half you spend, split it between something practical and something as a treat

numbersrule

Put some of it towards your increased energy costs.
What would your Grandparents have suggested you should do with the remainder?

Billycock

MX5huggy said:

Put it in a pension, depending on your current salary this might take 2 years. £25k Today should double in 20years you could retire 2 years earlier. 

I'd be disappointed if that was the eventual outcome. 

Albermarle

Billycock said:

MX5huggy said:

Put it in a pension, depending on your current salary this might take 2 years. £25k Today should double in 20years you could retire 2 years earlier. 

I'd be disappointed if that was the eventual outcome. 

If it was in real terms taking account of inflation ie. double in todays money , then I would be happy with that . Probably would need an average growth around 6 or 7% and considering most forecasts for the next ten years are less than that , it might even be a bit optimistic.