Exciting inheritance! How to hold it?

[Lionessadmirer]

My lovely uncle has left me and my two brothers £450k each after inheritance tax (we have just sent off IHT400).

For my brothers this is life changing. And it means I won’t have to support them financially.

My husband and I have a specific long term financial ambition to do with our house. But until the time comes to action that, we don’t need the money. We are both busy working full time.

my uncle self-invested nearly all his money via hsbc and ii. Given what I say above, is the sensible thing to do the same?

lastly, how should isas be used here please?

thank you and please raise a glass to our uncle who lived well and died content.

No help here, but ‘exciting inheritance’ is really distasteful.

Get advice from an individual financial advisor.

Agreed. Poor man.

Sorry, that should read independent financial advisor

How old are you?

I think realistically this is enough money that you probably ought to talk to a financial advisor.

But, without that, first thoughts are:

1. If you're going to be leaving money for a long time consider your options re pensions but check the tax implications of this as there are limits to what you can pay in. You would pay tax when you draw it down but it cuts out capital gains and you can potentially recover income tax on what goes in.
2. You and your husband can each put £20k per tax year into a stocks and shares ISA. this means you can have £80k in a tax protected wrapper by April.
3. NS and I also do premium bonds which aren't a high return but might act as a nice place to shove what you want to hold in cash without pay tax on your winnings. You could put up to £50k each in there.
4. There's a concept called "Bed and ISA" which I don't know much about but might be worth reading up on as I think it can be helpful if you're going to transfer funds in later.

I guess then the question is how you minimise your find costs (usually by using low cost index tracker funds) and make sure you have a well diversified portfolio.

As well as interactive investor (I assume that's ii?),=Vanguard also offer low fees, and I think they're client owned so big fees aren't an incentive for them.

That's a generous inheritance and you and your brothers are very lucky to have had such a lovely uncle who wanted great things for you all.

Enjoy the fruits of your uncles labour, this is what he chose to do for you.

But it is exciting!

OP has sadly lost her uncle. That was inevitable. In addition she has found out that he has left them a significant sum of money. That is exciting.

Hi ineffable.

thank you for replying, I appreciate it. That’s really helpful.

we are in our 50s -old enough to be able to access the pension at short notice.

Max out your isa allowance every year. It is the best way to have long term savings.

look up an IFA on the unbiased.co.uk website. A small low fee IFA is probably better than a big expensive one. They can help you with long term planning.

how long until you start your house project? If more than 5 years, look at stocks and shares rather than cash.

Not at all. It IS an exciting amount of money. That doesn’t mean she’s glad her uncle is dead though.

Thank you!

Thank you! Of course it is!

how utterly disrespectful would I be not to value and enjoy the legacy he has left us.

This

Thank you.

I’ve never had an ISA before except one of those cash ones that you open then realise they are pointless because you are never going to pay interest on savings anyway, so then it sits there for years with £1.67 in it….

Thank you!

That is a lovely thing for your uncle to have done for you & your brothers. You have lots to think about, reducing your exposure to tax, investment period, attitude to risk, current financial exposure, long term financial exposure. It’s a big enough sum to need to do some proper planning. I’m sure if you google you’ll find a questionnaire you can fill in to reveal the kind of investor you are.

Well you’ll certainly pay tax on £450k cash savings. At 4% £18000 a year. So it’s worth saving yourself a bit. Not that I am recommending you put £450k into a saving account, unless you were very risk averse or needed all the money very soon.

Thank you.

one of my brothers will probably need some support and help from me in handling his share so in a way I need to think for us both. We have very different needs from each other….

Bro has been in financial crisis for three years and won’t worn again.

Whereas dh and I are financially stable but have an unusual property problem that this should solve. meaning that our children won’t have to inherit the problem. Very excited as this has been a blight and I don’t want our kids to inherit an unsalable property

Yes! It’s a great problem to have, thinking about tax on savings!!!

I am elderly, recently made a will, and I am delighted to think the recipients would find a life-changing sum of money exciting. That's partly why I don't want to leave a significant sum of money to charities like the Humane Society or the Heart Foundation. Those organizations are left millions each year, and my bequest would be a drop in the bucket.

Nope, I hope my beneficiaries are delighted and excited to inherit a life-changng sum of money.

@Lionessadmirer I was left a decent inheritance nearly 30 years ago. A frugal aunt who spent what she wanted but liked her investments even more. She was happy.

She used Lloyds Private Banking. My inheritance stayed with them and we continued to invest. Lloyds Private Banking now use Schroeders for investments and they make money for us! We have a lot invested and now are worried about IHT! We have a planning meeting with our personal manager every 6 months. We discuss investment strategy (high, medium, low risk) and they alter advice according to our age and needs. DH has them as an umbrella for his pensions too.

For us, we don’t want to think about when to invest and when to pull out. We want them to suggest a strategy to us to meet our needs. It’s worked for us. They take care of ISAs and what we need to do and when. Yes, we pay a lot for this service but we’ve made a lot too. I’d trust them more than some guy down the road.

I bought myself a pair of diamond earrings when I inherited and invested the rest. Have some fun!

DH was a high earner when we inherited and we didn’t need to touch the investments on a regular basis. I would honestly use a household name for this amount of money. You need to talk about what your needs are and what money you need for living and what for dcs.

I would also recommend doing something that’s fun after you start getting returns. Have a very good holiday. All too soon you will be planning to minimise IHT. Our DC have already been given substantial sums so plan for this too if IHT will be an issue. Your uncle’s estate has already lost 40% above his allowance and we want to maximise funds for our DDs, not the government. Hope you enjoy your money. I still love getting our statements!

The Cats Protection.

Definitely go and watch the Rebel Finance School on YouTube and join their Facebook group. Also Meaningful Money - and best of luck x