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.

I posted earlier that we ended up in a similar position to OP when we had to invest/manage funds for DM when I became Attorney.

We actually went for a bunch of trackers, broadly reflecting the balance used by DH's pension fund for those wanting low risk investment using the HL platform. Everything did well because markets were doing well. Our performance was probably "average", which is what we wanted.

DH is now a year away from retirement and because his company pension is effectively invested in the stock market, we recently sold the shares in his SIPP and invested in money markets giving us more diversity (we also have property). If stock markets crash, as they might well do, we have a level of protection for funds we might want in the short term. (Stock markets are cyclical so if you are holding on long term short term movement matters less.)

We are content with our approach. We are not paying money for advice, nor are we using time becoming informed investors. I will confess to being sceptical about Financial Advisors. I know a couple who went into it as a second career, who, though they have passed exams, are not the brightest. Then there was the financial advisor linked to a High Street bank who advised my 85 year old mother, shortly before her dementia diagnosis and at a point where she could not change TV channels, to lock up most of her available funds in a 5 year investment vehicle, whilst a widow friend, whose late husband always handled their finance is panicking. Her investments are seriously under performing and trusted friends are warning her of problems.

Which is not to say that good financial advisors are not worth the money. The problem is: How do you tell who is good. And do you need advice if you are looking for low risk, "average" performance.

Back to my earlier post. Normally the best way of saving is to pay off debt. Mortgage is the obvious.

@FeelingSoDizzy And still the goady comments continue. Is there a reason you can’t let this go?

No goady comments from me, but you DO sound extraordinarily angry for someone who claims to be totally comfortable with the management of their £2m pot?

(And this is an internet forum - people are allowed to express different points of view without being told to 'just stop' because it appears to be upsetting you).

And you just keep going… You can’t help yourself can you?

😂
No, that's the whole point, I CAN (and do) help myself, by managing my own portfolio!

Any updates from the OP? For any meaningful suggestions we'd really need to know a bit more about the potential cost and timeframe for solving the problematic house.

You can’t help yourself goading was the point.

The OP is long gone, understandably,

It seems neither can you!😂Do you always have to have the last word on every thread or is it just this one that has really riled you?

I’m simply responding to your goading over investments, wondering how long you will keep going.. indefinitely apparently…

Yep response as expected!😂

Oh I hadn’t noticed you were a different poster jumping on the bandwagon.

Of course there would be another one..

I'm sure she'd much rather still have her 'lovely uncle' back than pocketing a measly £450,000.............................Wouldn't she 🤔?

By Government you mean the income which funds public services which benefit society collectively?

I've inherited virtually nothing and gave away most of it. If I dont end up in a care home I'll leave what could be an "exciting" sum of money. I hope the recipients will be excited.

Inheritance tax is the most unjust because the money has already been taxed once. It’s the reason we’re moving (and hopefully our kids) to Miami.

Would you feel better if it was a disappointing, miserable, unwelcome inheritance?

Yes use cash isa allowance £20k annually each. I usually have good interest. Premium bonds is another safe place not for interest but avoids tax.
do you have children or GC to invest for them in junior isas?

Just FYI, the cash ISA allowances are reducing next April to £12k. Still ok to put £20k in S&S ISAs.

In the long term, cash and premium bonds are not great choices as barely keep up with inflation so your money will depreciate over time. Unless you need quick access in which case fair enough.

Cash ISA are reducing in April 27 to £12k

April 26 you will still be able to put £20k into a cash ISA

Sorry that’s what I meant. I would refer to April 26 as ‘this April’ not ‘next April’ but appreciate we’re all different!

Good luck to you. At least that’s a few less people utilising public services they resent contributing to. Interesting that you are choosing to go the US. Widely acknowledged to be such a fair country 🙄

God yes - the medical bills especially in old age when you need it most, will be eye watering - we have a friend who lives in California and I honestly can't believe what they pay - it's makes private medicine here sound like a total bargain.

Thank you for the replies! I have read them all but not yet digested.

The next thing we have to do is sell some of the shares to pay the inheritance tax. That will be another learning curve.

i would like to sell the unit trusts (they have a new name now - OICD?). For two reasons. Principally because my uncle’s instructions say he would have sold these before were it not that it would generate capital gains tax. But that capital gains tax is now wiped away or perhaps I should say replaced with IHT. And secondly because they are not within ISAs. I guess those are two sides of the same coin.

he had some VCTswhich are weird and “bitty” but his instructions say it is best to hold these till the companies are liquidated.

so that leaves the hsbc and ii portfolios which he managed himself. I would like to ditch the tobacco shares as they make me uncomfortable. Other than that I have no clue…. Presumably we could sell a certain percentage of each stock? And so keep it “diversified”?

It depends what you want to achieve. When would you like to access the capital?

There were various types of diversification:
Asset classes - shares (equities), corporate bonds, previous metals (such as gold), government debt, etc.
Sectors - defence, tobacco, oil, tech, pharmaceuticals, etc
Regions - Global, North America, Europe, UK, Asia, China, Japan.
Themes - infrastructure, automation, aging population, etc.

If you're investing longer term (10+ years) then equities have historically provided the best returns, but can also go through periods where your portfolio is underwater.

If you're happy to accept the risks associated with equities, then it is very simple to get diversity by purchasing a single share in a global tracker fund.

This vanguard fund has an expense ratio of 0.06%

https://www.tipranks.com/etf/gb:0lmn

"Vanguard Total World Stock ETFThe Vanguard Total World Stock ETF (Ticker: VT) is a comprehensive investment vehicle that offers exposure to the entire global stock market in one convenient package. Designed for investors seeking a diversified, one-stop solution, VT captures the essence of the total market approach by including a broad array of equities from both developed and emerging markets across the globe. This ETF falls under the 'Size and Style' category, focusing on the Total Market, making it an excellent choice for those aiming to achieve a balanced portfolio without the need to manage multiple individual investments. VT stands out in its broad-based niche, providing unparalleled access to over 9,000 stocks, thereby encompassing large-, mid-, and small-cap companies. Investors benefit from the fund's ability to mitigate risk through diversification while still participating in global growth opportunities. With a low expense ratio, VT is not only cost-effective but also strategically structured to track the FTSE Global All Cap Index, ensuring comprehensive representation of the worldwide equity market. Ideal for long-term investors, the Vanguard Total World Stock ETF is a gateway to global diversification, offering a straightforward means to invest in the world's economic engine, from the United States to the farthest corners of the international market. Whether you're an individual investor looking to expand your portfolio or a seasoned financier seeking a global equity strategy, VT provides a well-rounded, efficient, and engaging investment opportunity."

When you buy one share in that fund, you're actually buying a stake in 4,889 companies.

www.tipranks.com/etf/gb:0lmn/holdings

Sorry, if you go to the vanguard website it's actually 9,942 companies.

https://investor.vanguard.com/investment-products/etfs/profile/vt

The money is invested based upon the size of the company, so the largest holding is Nvidia because that's the world's most valuable company.

Thank you! My uncle retired early so managing his shares was like a job for him for 25 years. I can’t and don’t wish to do that. So that suggestion of yours is probably the sort of thing that will land.