now ive got access to my inheritance. what the hell do i do with it?

[olsmum]

hi,
a relative left me a trust fund when she died, ive only just got access to it as i had to wait till my birthday this year to get it, only problem is that it is in shares.

i dont have my certificates through yet but im thinking ahead, i have absolutely no idea about this kind of thing. im not daft, i do realise that this not the time to sell them (i think!?) i also have no idea about tax etc. (only that inheritance tax is scandalous!- my fathers words!)

in theory i would like to pay off my current debt, put a bit away for my dd and invest the rest (in what i dont know as i cant afford a house in this area even with quite a large deposit and prob not the best time for getting a mortgage either?!)

can anyone give me link to a website suitable for numptys like myself?

Depending on how much you have, I would advise getting a good independent FA to help you through.

Try to find one 'word of mouth' though

You are right, i suppose im just worried about lookin foolish when i admit i know nothing about it, i still get my dad to take my car to the mechanics for me so i dont get taken for a ride! (Believe it or not i am usually quite intelligent so once it has been explained i should be fine!)

There are lots of web-sites out there that can help you. Try the share school at this one, www.thisismoney.co.uk/help-and-advice/advice-banks/sectionIndex.html?in_advicepage_id=96&in_page_id= 90 for a start, (just don't tell any-one as it is the Daily Mail web-site). There are plenty more but I can't remember them now . Will post tomorrow if I can remember more.

If you're in the UK you don't need to worry about inheritance tax as the that will have been paid by your relative's estate when she died.

However, I think that you might need to get some advice about tax. For instance, you will need to declare any dividends from the shares as income and pay income tax. Also I imagine that there will be some capital gains liablity when you sell the shares, this is a tax on the amount of profit or increase in value you have made on the shares. I've no idea whether the gain would be calculated from when your relative died or from when the trust fund was dissolved.

first thing you have to be aware of is your capital gains allowance. £9600 I think, sell shares more than this value then you will incur a tax liability. Of course I am assuming that the shares will be in your name. Beyond that you will need specialist advice and i would consult an accountant for the tax implications and an IFa for general financial advice.
You basically have to look at your life and see what you want out of it and how the money you have fits in with it. You do not say how much the inheritance is? Do you have amortgage? Pensions? Can you buy a property to let out? Etc etc really.
Additionally if you have a family might you need a will now?

hi, thanks for your advice, the shares will be in my name, i dont know exactly their value just know but i expect it will be in the region of about £30,000 once i have paid off loan, overdraft etc. no i dont have a mortgage at the moment, or a pension . this is basically going to be the first time i have had savings of any sort. i'm 25 and working part-time (dd is 4yo) so this is a pretty huge amount of money for me and i just want to make sure i dont waste it, i do realise that im lucky to be in this situation, i dont earn a lot and most of my disposable income goes on dd so it would be easy to spend it on a nice holiday, new car etc but im determined to use it wisely.

I really would see a good IFA, and possibly a tax adviser/accountant. All you need to think about in advance is what you think you might want to achieve - eg pay off your loans, put some away for your daughter, etc.

They will advise you on what your options are, the tax implications of those options, etc. Really, really don't worry about not knowing what you are talking about, it's their job to explain it to you. You could always take your Dad along with you if you are worried.

I have put 20k into 'Zopa' the people that set up EGG set this up too.Its social lending and you can get some pretty good rates and save your money until house prices stabalise. I have been with them for nearly 2 years and have not any defaults.

( sorry I don't have any knowledge re shares and tax)

If you are recieving benefit like tax credits etc be careful since your savings may impact upon them

Capital Gains tax would only come into force if you made £9,600 profit on the sahres when you sold them - ie the difference in the value from when the inheritance bcame yours and when you sold them.

There's good advice on savings on both of these sites:

www.moneyfacts.co.uk/savings/default.aspx

www.moneysavingexpert.com/banking/

Hope this helps