Potentially life changing inheritance - wwyd?

[NotThatWise]

First time poster, apologies if I missed info or added too much detail.

I have recently inherited my childhood home, owned for 40 years, we are the only people to have ever owned it. House is mortgage free.

I’ll try and layout the facts, and I’m interested to know what other people would do in this situation. What would your future look like?

Childhood home value £350k
My home value £325k, £100k left on mortgage
Both houses are the same size in the same town.
DH (47) and I (43) plus 2 children (8 &12).

I’d sell both, and buy bigger. And I wouldn’t be afraid to increase that mortgage a little either providing that you can afford to and live comfortably. (Bigger house, bigger bills and all that).
If you can afford to upsize, live in the house you prefer as a family and sell the other one. Speak to a reputable FA who can help you invest the rest.

I'd sell both, buy somewhere bigger mortgage free for £450-£500k, put some in savings (or buy a decent wedge of premium bonds), put some in pensions, and treat the whole family to a lovely holiday.

I cannot imagine a worse time to do this. Put the money in a pension!? It's more likely to cost you money than to make you any.

I would sell one house while deciding where to buy a new one. Relocation is only a good idea if it's something you both really want and you do your homework properly. Are you thinking of a whole lifestyle change or just a new area? Remember to allocate some money to pensions/savings so that you have a long term plan for retirement.

What are your other assets like? If you’re comfortable with pensions and investments, then yes I’d sell both and buy the dream house. But if not then I’d sell one, pay off the mortgage, and invest the rest.

Or You could just invest ( not as exciting as moving I know )

£100k to pay off mortgage
£20k each now into an ISA then another £20k after April = £80k
£350k - £180k = £170k
£20k lovely holiday (s)

Invest in bonds ( for example ) @4.5% ( currently, although some at 5% )
£150k @ 4.5% = £6750/yr ( minus tax )
Next year put £20k into ISAs etc etc each year

you could keep a few ££££ back to buy premium bonds just for a bit of fun 🤩

Save the interest to help kids in Uni if they go, or similar

Sorry I've not read anyone else's comments. I would still the inherited one first, pay off your mortgage. Put the remaining money in a high interest account (not very high currently but 4.6% ish). Then you are sat with your house £325 k, plus cash £250k, £575k. Then chill and decide next best step. Don't rush, make a cool and calculated decision.
But set a time limit, don't let it drag (like i would?

Sell both! If DH and the kids are up for a big move then I'd do it!

I bloody love looking at houses! Move up North, you can get some amazing houses! www.rightmove.co.uk/properties/144101933?utm_campaign=property-details&utm_content=buying&utm_medium=sharing&utm_source=copytoclipboard#/&channel=RES_BUY

@NotThatWise How secure ua your relationship? If you sell both houses and buy a bigger family home your inheritance will become a marital asset. If I was you I'd discuss what you need to do to secure your inheritance or at least some of it so in the even of divorce you have some personal assets.

Hopefully the lie we have had drummed into us the past 50 years, that bricks and mortar is where the money is at, is finally showing itself to those that have had their eyes closed

@NotThatWise - choose the house you which to reside in and sell the other and pump it into your pensions , and your childrens pensions . You will still be leaving A property to allow the kids a kick start, but everyone forgets their pensions which are the most tax effective way of making savings for your older years. Believe me, working past 60 isnt fun - it hurts

Given both houses have almost the same value and are in the same town I assume they are similar in terms of size, etc. In which case I wouldn't bother with all the hassle of moving, particularly since, as a PP said, your husband might feel odd living in your childhood home. Personally I'd probably sell and pay off your mortgage in the first instance and invest the remainder, at least temporarily. Perhaps have a memorable holiday, assuming you don't have lots of debt to pay off, then do any outstanding work in your current house.

This.

I also 100% would NOT rent one out and become a landlord, as some have suggested.

I would sell both but stay local in a larger property mortgage free. What difference would £100k make to the type of property you could get?

That way you get a larger house mortgage free, still have a good buffer in the bank and could also save what you are currently paying on your mortgage. Its all very well saying move away and start again but the reality can be very different. Its sounds like an exciting adventure but it can be lonely starting again from scratch and I would be wary of making such a huge decision after a parental bereavement. It can really skew your thinking for a good few years as you learn to adjust to the loss.

So do I but why stop at houses
Heres The Holms of Stromness up for sale

Your very own island and 12.5 acres ( 23 at low tide 🤣)

£300,000 !

I would 100% sell the one I didn't want to live in, but not because I think that would be the most profitable course. I'd just hate to be a landlord, it seems like an endless stress and I'd be shit at it. I only want to own the property I live in at any given time.

Actually, this is a very good point and one that should not be brushed away. I would be seeking legal advice on protecting your inheritance if possible in any future purchase. Sounds awful but just pop your head on to the Relationships board to see how many women get blindsided by a foolish man in a mid life crisis buggering off with some young thing.

Well that amount of money may seem large - but it's a long way from funding a complete change of lifestyle, unless there is a lot you are not telling us about you/ your husband's work (like it can be done anywhere).

So - sell both houses (and if you think the family home will take a while to sell the advice to move in there is sound as Capital Gains Tax does not apply if it's been your main home). Buy a nice detached house, make sure it is well insulated and if money is left get a newish car. Put anything remaining into your pensions or ISAs if they still exist.

Not life-changing for you and your dh, too late I am afraid, but amazingly potentially life-changing for your dc - this is wonderful! Put them in a good private school away from behavioural troubles of the mainstream comps. (I am a state school product, btw).

Re
Main home CGTax

It will depend how long you have been not living in your main home.

You always get the last nine months free if you have moved out.
But if it’s empty for a year and 9months you’ll pay CGTax on that year
minus private residents relief

If it was me, I’d sell both, buy somewhere mortgage free and put some money on the bank for a rainy day. Life is for living, not always about the money. If it gives you the change to be around more for your kids, I’d think about going part time.

It wouldn’t cover all 16 years of private schooling if they moved now ( for an 8&12yr old).

If you don't love either house and feel squeezed into your current 3-bed semi then I'd sell both and buy a house that you want to live in. With the rest I'd speak to and independent financial advisor and see what the best thing might be for you do in terms of investing for your future.

Sell both houses. Buy one you like. Put the rest into pensions.

I would sell both and buy a house I really wanted that suited us better, with money left over for a couple of nice holidays. Enjoy it, it was given to you to make life easier, so do exactly that, start again x

There's no tax to pay if it's sold, as it's part of estate that would have already been taxed via IHT if it reached the current limits.