Inheritance money, help!

BlueDressingGown

Heedtheadvice said:

As is often the case when I read posts such you started this thread with, I cannot add much more opinion than those already expressed.

I like to play safe ( a sort of risk reduction! ), and who am I to suggest what you do with your inheritance other than think about security ( housing, future needs, emergency fund etc) and cost reduction ( debts etc) plus do get some enjoyment out of it too without too much of an impact on the other suggestions.

One thing that does strike me,  however  is your statement regarding tax. If you are an Executor I would hope you are fully conversant with your duties - and this includes taxation regarding the Estate and Inheritance rules. If not then do ensure you are doing the right things before getting into potential deep water. 600k Estate value could well mean a tax situation ( a 2×600k Estate value even more likely) and then involving any recent gifting by your mother and latterly informing HMRC regarding the house sale. All this needs clarity and sorting prior to dispersal to beneficiaries.

Will be very pleased if this latter part of my post has been pointless!....but if not you have work 

Thanks for this, I had the services of a probate solicitor who handled all that and the conveyancing one will do his side of things. I think when I mentioned tax it was more about how do I pay the tax man on the Interest on all Those separate bank accounts? And my private pension and job will put me over the threshold, I’m fine about paying tax, well not really , but is it automatic? Or do I have to do anything?  The shares in the estate were not exactly equal so we were just under the million. Cheers

badmemory

Well there is no tax on premium bond wins & none on ISAs.  So that is the 1st £70k taken care of.  0% tax on the 1st £1000 of taxable interest so that is around another £20k.  Then whatever you invest in your house & whatever you decide to give to your children.

Unless you already file self assessment, then the first year they will probably send you a simple assessment, which is basically a bill & the next year your tax code will probably be changed.

Bigwheels1111

If you buy a property do not buy leasehold.
The lease holder has control and can demand huge sums of money for repairs.
I lived in London from most of my life, lost my wife last year, made homeless, so had no choice but to move.
As property & rent are too high.
I owned a house in Lincolnshire for 20 years, lovely place to live.
May end up there again in 2 years, when I have surfactant funds to buy a house.
I should be able to buy a 4 bed house for less than a one bed flat in outer London.

Angelica123

BlueDressingGown said:

Heedtheadvice said:

As is often the case when I read posts such you started this thread with, I cannot add much more opinion than those already expressed.

I like to play safe ( a sort of risk reduction! ), and who am I to suggest what you do with your inheritance other than think about security ( housing, future needs, emergency fund etc) and cost reduction ( debts etc) plus do get some enjoyment out of it too without too much of an impact on the other suggestions.

One thing that does strike me,  however  is your statement regarding tax. If you are an Executor I would hope you are fully conversant with your duties - and this includes taxation regarding the Estate and Inheritance rules. If not then do ensure you are doing the right things before getting into potential deep water. 600k Estate value could well mean a tax situation ( a 2×600k Estate value even more likely) and then involving any recent gifting by your mother and latterly informing HMRC regarding the house sale. All this needs clarity and sorting prior to dispersal to beneficiaries.

Will be very pleased if this latter part of my post has been pointless!....but if not you have work 

Thanks for this, I had the services of a probate solicitor who handled all that and the conveyancing one will do his side of things. I think when I mentioned tax it was more about how do I pay the tax man on the Interest on all Those separate bank accounts? And my private pension and job will put me over the threshold, I’m fine about paying tax, well not really , but is it automatic? Or do I have to do anything?  The shares in the estate were not exactly equal so we were just under the million. Cheers

In terms of tax - Banks should be reporting your interest to HMRC and adjusting tax code accordingly. If you earn over 10k in interest which you will likely do - you will need to fill in a self assessment form. You can get a tax advisor to do this for you. However, if your income sources are just pension and savings interest - it shouldn't be too complex to fill in the self assessment yourself. Just keep goof records of what's coming in. 

You've mentioned that you are already withdrawing from a pension.  Have you costed whether you actually have enough in your pension to last you? 

 Accomodation costs will be a huge ongoing cost for you - you could consider getting a small mortgage with a large deposit. It would be worth future proofing where you buy so it accommodate potential changes in health/mobility in the future. 

There's no rush to make a decision. It's important to do your diligence and make sure you consider all options. It's a lot of money but it's very easy to splurge on a few things and notice the money quickly dissipate. 

You need to sit down and consider your long term goals and then work out how your money can beat serve you. Everyone will have opinions but they might not be what is best for you. 

Does your current pension provision ensure you can live your retirement comfortably until yours 90s?

Albermarle

Or stash the money and live frugally on interest

There seems to be a lot of focus on keeping all the spare money in cash savings accounts.
This would not be the normal advice in these circumstances, as inflation is a problem if you keep cash very long term.
At least some of the money should normally be invested for the long term, to get some better returns.
I do not mean buying and selling shares or crypto or anything like that. Just a mainstream fund that you just buy and hold long term.

badmemory

I know what I would do but then you are not me.  I watched a friends rent go up 80% in four years.  He doesn't seem to care but it would be driving me mad.  If you moved away to buy would your children come too or are they too settled.  I know - more questions than answers but that is the nature of the beast.  Good luck.

Heedtheadvice

Glad to hear that the Estate that you are responsible for has been dealt correctly as regards Probate - and possibly the same solicitor is still assisting you till the Estate is dispersed?

As you are just going through the sale of the property ( presumably being sold as part of the Estate rather than as the beneficiaries as tenants or tenants in common ) then hopefully your conveyancer will declare the sale to HMRC within the 60 day limit to report irrespective of any potential  Capital Gain ( if there is one compared to the value at date of death!). If there is a capital gain you may be able to offset some of the gain with the costs and beneficiaries individual CGT allowances, if not already used in 25/26 tax year.

As Executor you are responsible to see that the dealing with HMRC done.

Again hopefully you have that in hand and it does not affect the value of the inheritances you are planning for.

Mrs_Z

Hi, 
first of all, my condolences for losing your mum.
Such a big sum of money may feel overwhelming and scary, but you've already got some useful pointers here at the forum and here are mine:
It may help to broadly divide the money into buckets; housing, pension, savings/investments, gifting to your children and lastly some 'fun' money for spending/holidays etc.  Depending on your circumstances, if you decide to go down the route of purchasing your own home; this may swallow the majority of the money anyway.
For savings; premium bonds and ISAs have already mentioned, and would definitely be on my list if I were in your situation. If you have not yet used your ISA allowance for this year, you can pay in £20k this year, and another £20k in April.  If you park £50k in premium bonds, that's a total of £90k taken care of.
I'd be extremely wary of accepting advice 'from friends' - by all means, listen to what they have to say, but do not act or commit yourself to anything.  If you don't go down the IFA route, at the very least post your plan here on the forum for critique - many forum users do that.
Lastly, take a breath - you are not in a hurry - don't make any sudden decisions that you may come to regret later.
Best of luck and don't forget to enjoy some of the money as well. That can be surprisingly difficult as there are often so many emotions tied to the origin of the money.

poolboy

I would buy somewhere you really want to live.  London rents are insane, landlord here, my long term tenants get good deals but won't be able to live there on retirement.  Take your time don't rush into anything.

enthusiasticsaver

Presumably you will end up with about £300k then assuming it is split between 2 siblings.  The estate may be liable for inheritance tax so presumably the probate solicitor has talked about that.  The allowance in the UK for 2025 is £325k which may increase to £500k if there is a residence being passed on. If your father predeceased your mum (and they were still married) then you could possibly use his allowance too depending on when he died and how his estate was dealt with. 

The £85k guarantee limit can be temporarily increased in the event of a property sale meaning you do not need to split the money immediately.  It also does not apply to National Savings so you could put it in N,  S and I while you are deciding what to do. 

I personally would not go down the route of an IFA immediately until you have an idea as to what you wish to do with the money.  You may want to gift some to your adult children or buy a property/car  or deal with outstanding debts or whatever. The usual places to invest when you know how much you are willing to put aside (assuming you do not need it accessible) are ISAs (stocks and shares or cash) or pension.