Can anyone advise on cash/gifts/inheritance from family overseas, please?

[Obstreperous]

I'm hopelessly naive on this subject, but we need to get more organised. DH is likely to inherit around £30k in the next couple of years from family overseas. Where should I start trying to understand the financial implications for us receiving this?

They also want to give us some cash to celebrate the birth of our next child, and have given us pieces of jewellry/a small gold bar that we still have but they've said they'd be happy for us to sell (they are from a culture that's very big on this type of gift - totally alien concept to my family!). Can anyone advise on this type of gift? Is there anything we need to do?

I'm aware it's all a bit complicated. Tbh I'm not even sure who we would go to for proper advice (a tax advisor? Would they deal with such relatively 'small' sums? Not small to us, obviously). Any pointers appreciated.

There are no UK tax implications for you in this although when you inherit the money having savings may impact your benefit entitlement.

So, they could transfer the money into my husband's account, he could transfer it over here into sterling and that would be it, no problem?

Is there a limit to how much cash they can give us in a year/a point over which one of us would need to do a self-declaration?

Thank you for your help!

Unless you receive any benefits that have a savings limit, you don't have to declare anything to anyone. Cash gifts are largely not taxable but any interest you receive on the money is.

So your main concern is to work out where you're going to keep this money so that it works well for you, grows in value and is preferably as tax-efficient as possible. Talking to an independent financial advisor is a good way of working out how to achieve that.

First priority is usually to pay down any expensive debts that you have. Cash earning 3% in a bank account is no good if you're paying out 18% on a credit card balance, for example.

If you have no debts you'll be pointed towards Cash ISAs. Take out one each and you can deposit £5640 in each tax year (April to April) ... £11,280 in total with any interest tax-free.

After you've used your Cash ISA allowance there is a wealth of options for what's left. Investments, pensions, deposit accounts, bonds, property.... some more risky than others, some more long-term than others. As you have children, you might feel it appropriate to put some money away in their name for the future, for example.

Good luck

Thanks Cogito - we were planning on putting the bulk of the inheritance against the mortgage, and the balance will probably be eaten up by things we need (like a new boiler, new fencing etc). Does that sound sensible?

It's always a personal judgement. If your mortgage is costing you more than say 3 or 4% then paying some off makes a lot more sense than having a too-big balance in a deposit account earning next to nothing. Improving your home and bringing down fuel bills with a new boiler are great ideas. Make sure you keep back enough easy-access cash at the end as a 'rainy day fund' - that's a good use for Cash ISAs

Thank you - that makes a lot of sense. Great advice!