If you're a beneficiary, the executor should pay any inheritance tax due before passing the cash to you. If you're both executor and beneficiary, you need to be aware that any lump sum of more than £325,000 in cash, may be subject to Inheritance Tax (or £500,000 if you have the added advantage of residence nil rate band).
Read about Inheritance Tax
You've inherited cash. Now what?
Important information - please keep in mind that the value of investments can go down as well as up, so you may get back less than you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
Inheriting cash
If someone's thought enough of you to leave you some money, you'll want to use it wisely and for it to have a positive impact on your future. Before rushing into any big decisions take a step back, think what it could really mean to your future and then look at some options as to how your money can work harder for you. Need help deciding what to do with your inheritance and want to talk about it? Financial advice might be for you. Call us on 0800 058 4443.
Here's what we'll cover
Things to ask yourself
If you've received a large sum of cash, you need to think about what else you might need the money for before deciding if getting it to work harder for you (and potentially investing it) is right for you.
- Are you in debt? - Do you have any loans, credit cards or a mortgage to pay off?
- Do you have cash savings? - Aim to keep some savings for a rainy day or emergency.
- What are your goals? - What do you need money for? Now? What about the future?
- Keeping all of your inheritance? - Do you plan on using all of your inheritance or will you pass any of it on? Whether that's in the future or sometime soon.
- Thinking about investing? - Are you wondering about the benefits of investing your inheritance and want to know more?
- Looking for financial advice? - Have you thought about financial advice? Knowing that you're making the most of your inheritance can help bring peace of mind.
- What about your own estate? - Receiving an inheritance can cause new unconsidered Inheritance Tax challenges for your own estate. Do you need to rethink your beneficiaries, executor and who gets what and when?
Cash and tax
Can your inheritance work harder for you?
An inheritance can unlock opportunities that you might never have thought of before. Perhaps you'd like to pay off some, or all, of your mortgage or a credit card bill you've run up. Or maybe you'd like treat yourself to a holiday or something you've been saving up for before putting your inheritance to work. At which point, here are some options for you to consider.
Save
A high interest savings account is relatively low risk, but inflation means the value of your money in real-terms decreases over time.
Invest for your future
Planning for a wedding, holiday of a lifetime or buying a home? A Stocks and Shares ISA is a tax-efficient way to save and potentially grow your inheritance, but this isn't guaranteed.
Invest for a child
You might not need the inheritance you've received. You can save tax-efficiently for the children in your life by opening a Junior SIPP or Junior ISA for them. Or set up a bare trust for them.
Invest in property
Whether you've inherited a property or you're looking to buy a property, bricks and mortar have proven over the years to be a good investment - although house prices can fall too.
Invest for retirement
Save tax-efficiently for your retirement by opening a SIPP. You could also consider the pros and cons of transferring an inherited pension to it.
Helping others
There are tax-efficient ways of helping others. You can contribute to someone's ISA and SIPP. And there are also ways of gifting your nearest and dearest with no IHT implications.
How we can help
If you've decided you want to invest your inheritance, you'll need to think about how much support you want from us. Some customers like to do their own research before investing. Some prefer to use guidance tools. And some customers want a personal recommendation by talking to a financial adviser. We're able to help however much you need from us.
I'm thinking about taking financial advice
If you're looking for a personal recommendation that considers tax efficiency, and which will give you peace of mind, our financial advisers can do all the hard work for you.
I want to open or transfer an account
If you already know which account you'd like to open - or transfer into - you can open and transfer from here.
I want to know which account is best for me
If you're not sure which account is right for you, this simple quiz will help you decide.
I want to choose investments
After you've opened an account, we have thousands of investments to choose from. We can provide tools and guidance to help you choose your investments.
Important information: please note that this information and our guidance tools are not a personal recommendation in respect of a particular investment. If you need additional help, please speak to an authorised financial adviser. You should regularly reassess the suitability of your investments to ensure they continue to meet your attitude to risk and investment goals.
What next?
What to do with an inheritance
Learn more about your options and how to get your inheritance working harder for you.
All inheritance topics
To learn about the different types of inheritance and the topics surrounding them, head to our inheritance home.
