If you were given £100K, what would you do with it?

[TooCautiousToBlowIt]

PIL have decided to give us £100K as they are worried about inheritance tax. No strings attached. (I know, they are wonderful!)

Only thing, is what do you do with the money? We don't want to just blow it. Nor do we want it to sit in the bank, eroding. Property is too risky these days.

What would you do?

You need to talk to a solicitor/tax advisor to set up a trust fund. You can set it on any terms you want - that the funds are only available for specific purposes, at any age you want, whatever.

pay off the bills, get a car, have a holiday (finally after 8 years of none wouldn't spend more than £5K on a house/holiday) get a house. Would also try to get some money aside for DS to have for his college fund.

Lucky you!
Firstly we can only pay off 10K a year towards mortgage, so would set aside 3 years worth for that = 90k
I want a new bathroom = 3k?
Holiday = 3k?
Can't remember the ISA rules but some to that = 3k?
splurge the rest = 1k

Whilst it is lovely you are going to have to hope that they both survive 7 years or you could still get stung for IHT on the value of the "gift" which above the annual allowance would be taken into account with the rest of the estate. Most prudent is to reduce your mortgage/debt

I don't know anything about setting up trusts - you'll need to check it out with your solicitor. It's not my field. Plus I know all the rules changed in Finance Act 2006 so anything I did know is probably totally defunct.

LIZS is right but you do get taper relief after 3 years so even if your PIL don't live the full 7 years you still get some IHT reduction which of course, you wouldn't have got at all if they hadn't made the gift.

I would pay the majority of it off my mortgage (then the mortgage would be more manageable) and then i can move my partner in and cut the tax credits that I get so we can live together and be a family.

Put some aside for a rainy day, get a will and sort out that sort of stuff.

Get new conservatory or extension as mine is falling apart.

Pay off credit cards completely each month.

Save the money that i pay off the mortgage every month and be richer.

Pay off girlfriends loan for the car.

Have a chinese and lots of cava.

See an IFA or proper advice.

Go on a cruise and make DH take some time off work so I could see him for a change.

yopu cant give that much at once can you?

I would put it all into the mortgage, it would nearly make us mortgage free.
with the spare income each month ( we would reduce payments not term) I would make sure we saved money for holidays and all enjoy it
if the worst happened we could always increase the mortgage again.

Zippi is right I think - there is a limit to how much you can give I think even under the 7 year rule.

I would find a friendly IFA to work out the best way of doing this.

There's a limit to how much you can give someone full stop?

i dont think you can receive a tax free gift of that amount

Ah. Tax free.

I'd put it as a deposit on a house. Definitely. With £100k equity I wouldn't worry about prices really as long as I could afford the mortgage and loved the house.

But watch out, inheritance and cap gains taxes will apply.

there is no financial limit at all. if I had a million pounds I could give it to someone as a gift without there being any tax liability.
(aside from IHT)