Inheritance

[arickitupyourpompom]

I have received an inheritance from my grandfather if 200k. I could use it to pay off a large chunk of my mortgage (currently 350k) BUT I would like to be able to access the money should I need it. With everything that's going on with Covid I am worried I could lose my job and would need this for redundancy. As such I was considering buying a BTL and then I could sell it if needed. However if I do this and there is no mortgage will I be taxed at full wack on the rent? I am quite risk adverse and wouldn't want to do anything risky with it but at the moment it's just sitting in the bank - doing nothing!

How much you're taxed depends on the rental income plus your employed income

I'd put £50k in premium bonds as an emergency fund that you can access and use the rest to pay down the mortgage

The answer to getting access to your money rather than tying it up in your mortgage is to arrange an offset mortgage and use some or all of the £200k to offset the interest. You will always have access to it if needed.

If you buy a BTL you will be taxed on the full income if the mortgage is paid off. There is very little tax relief on mortgage interest for BTL these days anyhow, do consult an accountant or someone knowledgeable to run the numbers for you before investing - you might even tip into higher rate tax with your BTL rent depending on your current income. But now seems a risky time to assume you can buy then sell if needed, you might end up selling at a loss, the virus has the potential to disrupt the economy - including the housing market.

I wouldn't be investing in bricks and mortar till we know how the market looks tbh.

Thanks all good advice

pay off a chunk of your mortgage

don't get a BTL - that would be putting too much money into property in a very uncertain market.

invest some in an EFT tracker fund that tracks the global markets. You aren't trying to beat the market by buying individual shares, but if the stock market goes up, then your funds go up. nutmeg is good for having low annual charges & a simple website.