what to do with inheritance


S

Sue Dyer

I am about to inherit £150K. What's best to do with it?
I am a house owner, no mortgage, and about£10K of my own savings (ISA, BSoc,
etc), no shares as such.
Thought buying a small house/flat might be best & safest route, although
aware of CGT if/when sold, or could pass it to the kids.
I know I can (& maybe should) go get independent financial advice, but
others' ideas would be helpful. I'm looking to retire in around 7 years
time if that's relevant. Thanks for any advice
 
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R

Roger Mills

In an earlier contribution to this discussion,
Sue Dyer said:
I am about to inherit £150K. What's best to do with it?
I am a house owner, no mortgage, and about£10K of my own savings
(ISA, BSoc, etc), no shares as such.
Thought buying a small house/flat might be best & safest route,
although aware of CGT if/when sold, or could pass it to the kids.
I know I can (& maybe should) go get independent financial advice, but
others' ideas would be helpful. I'm looking to retire in around 7
years time if that's relevant. Thanks for any advice
I guess that the first decision is whether to accept it or get rid of it at
the outset. For example, if your estate is already over the IHT limit and
you have no need for the money - and your kids are old enough and
responsible - you could effectively give it them *now*. The safest way is
via a deed of variation to the will so that, despite having been left to
you, it goes straight to them and doesn't increase your IHT liability even
if you were to die very soon.

If you *do* have a use for it - like improving your house, or moving to a
better one, or if you fancy a few exotic holidays - then accept it but put
it somewhere reasonably accessible. Buying another property is possibly a
better long-term investment - but for whose benefit? As you say, it will be
subject to CGT - and it will need to be maintained, and council tax and
other utility bills etc. paid. And if you tie the money up in property, you
won't be able to spend it on other things. If you would make a lot of use of
(say) a holiday cottage, and could possibly rent it out when you're not
using it, it could be viable.

I'm sure that others will be along with lots of alternative suggestions, but
that's my 10 penn'th!
--
Cheers,
Roger
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PLEASE REPLY TO NEWSGROUP!
 
D

Daytona

I am about to inherit £150K. What's best to do with it?
I am a house owner, no mortgage, and about£10K of my own savings (ISA, BSoc,
etc), no shares as such.
Thought buying a small house/flat might be best & safest route, although
aware of CGT if/when sold, or could pass it to the kids.
I know I can (& maybe should) go get independent financial advice, but
others' ideas would be helpful. I'm looking to retire in around 7 years
time if that's relevant. Thanks for any advice
Speaking as a landlord, I'd avoid both residential and commercial
property - it has risen rapidly over the past 5 years, is
significantly above trend and as such offers poor value for money.

Getting independent financial advice is good as long as you double
check it here before signing up to anything, as it's easy for people
who understand personal finance to spot potential missselling. IFAs
take a holistic view of your finances and might pick up things you
haven't considered. When choosing an IFA, get one with a G10
qualification so that they can deal with inheritance issues at the
same time. See
<URL:http://groups.google.co.uk/group/uk.finance/search?hl=en&group=uk.finance&q=G10+STEP>.
Whilst talking to the solicitor it's worth getting them to put in
place powers of attorney at the same time, then you have everything
set up at once.

Good holistic view here
<URL:http://www.fool.co.uk/10steps/financialfreedom/welcome.htm>

Make sure that you're insured against life's disasters, but because
you have plenty of capital, you can self insure to some extent, and
have a large excess, using insurance just for major disasters. See
<URL:http://www.google.co.uk/search?hl=en&lr=&q="pay+as+you+go"++medical+treatment&btnG=Search>

Equity investment returns -

TMF posters 11%pa dividend growth over 40 years -
<URL:http://boards.fool.co.uk/Message.asp?mid=10327587>

TMF posters 9.5%pa return over 20 years -
<URL:http://boards.fool.co.uk/Message.asp?mid=10327450>

TMF posters 11%pa return over 35 years -
<URL:http://boards.fool.co.uk/Message.asp?mid=10324246&sort=whole#10325222>

I'd use <URL:http://www.fool.co.uk/share-dealing/our-service.htm> and
invest in one of the following, in order of personal preference -

High yield, buy and hold strategy
<URL:http://www.fool.co.uk/specials/2006/specials060208.htm>
High yield, change each year
<URL:http://boards.fool.co.uk/Message.asp?mid=10414020>
iShares FTSE UK Dividend Plus
<URL:http://www.trustnet.co.uk/etf/funds/?fund=34>
Jupiter Income
<URL:http://www.trustnet.co.uk/ut/funds/port.asp?fund=1324>
Invesco Perpetual Income
<URL:http://www.trustnet.co.uk/ut/funds/?fund=477>
Invesco Perpetual High Income
<URL:http://www.trustnet.co.uk/ut/funds/?fund=476>

You should be able to get an income of ~£6,500pa.

Have you missed any contributions to the state pension in the past 6
tax years ? Get a forecast from
<URL:http://www.thepensionservice.gov.uk/resourcecentre/br19/home.asp>.
Do you have any company/private pension provision ?

hth

Daytona
 
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W

whitely525

I am about to inherit £150K. What's best to do with it?
I am a house owner, no mortgage, and about£10K of my own savings (ISA, BSoc,
etc), no shares as such.
Spend the lot. It's the ethical thing to do.
Thought buying a small house/flat might be best & safest route, although
aware of CGT if/when sold, or could pass it to the kids.
I know I can (& maybe should) go get independent financial advice,
Be careful. Sharks in them waters...
 

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