Consider any tax implications:
Inheritance tax is usually paid with funds from the estate of the person who’s died. So in most cases, once you’ve received your inheritance you won’t need to pay any more IHT on it. However, you may need to pay income tax if your inheritance generates an income for you. You may also be liable for capital gains tax in some circumstances. For more information see GOV.UK Inheritance tax.
Consider paying off or reducing your debts
The interest on paying back money can wipe out any gains from savings. That’s why financial experts advise paying off debts before you think about putting money away. You may not want to pay off all your debts with your windfall, but if you can it’s important to deal with debts like loans secured against your home or credit cards with high interest rates.
Consider putting something towards long-term goals
It can be tempting to spend an unexpected windfall on something short-term (such as a holiday or home improvements), but it could be a great shortcut to getting your long-term finances on track. If you don’t have much in the way of savings for your retirement, you might want to use your windfall for your pension pot. You can do this either by topping up an existing pension, or starting to save into one to help make sure you’re financially secure when you stop working.
Do not take risks
Don’t get involved with financial schemes or risky ventures. Don’t let others exploit you because of your new money.
Hire a Financial Advisor
If you’ve received an inheritance in the form of stocks or bonds, you should speak to a financial advisor. Many heirs make the mistake of leaving their inheritance in the same type of investment that was left to them. Even though an investment may have performed well for your family in the past, it could become troublesome in the future. An advisor can help you outline your financial plan for the future, and reallocate assets accordingly.
Would you like to save money when transferring your inheritance money overseas? Consider using RationalFX, with the help of one of our personal specialists, we can transfer your money quickly and securely. We pride ourselves on our bank-beating rates*, and have processed over £8bn in international payments to more than 150,000 clients. Try us today!
*RationalFX offers bank-beating and competitive exchange rates. For further information on this, please click here.