The estate of the deceased will pay any potential Inheritance Tax before you receive your inheritance so normally you will not have to worry about settling any tax demands. 

If you received a gift of money, property or valuable possessions from the deceased within seven years of their death then you may need to pay Inheritance Tax. If you inherit shares or property and then later sell them, you may be liable for Capital Gains Tax on any profits. 

Our Financial Planners can help you mitigate any tax demands with careful planning.

The amount of capital you need to maintain your chosen lifestyle will depend on many factors. These include your own definition of comfortable but also your age.

A cash flow analysis is extremely helpful in ensuring that your assets are sustainable. It will allow you to keep track of regular outgoings such as mortgage payments, school fees and insurance premiums. But you’ll also want to keep an eye on discretionary expenditure such as holidays, cars, clothes and entertainment.

There are several common, and harmful, mistakes that can lead to people squandering an inheritance and doing things they later regret. Most come as a result of letting the money control you rather than the other way around.

Spoiling yourself with impulse purchases can escalate into a habit which can quickly erode your capital. This can be spending on yourself or on family, friends and even your favourite charities. This is noble, but if it is done in an unstructured and tax-inefficient way, you can soon find yourself running out of funds. On the other hand, people who suddenly come into a large sum of money can become almost paralysed by inertia. They are so afraid of doing the wrong thing, such as investing in a bear market, that they end up doing nothing.

Luckily, all of these mistakes can be avoided by taking time to devise a proper plan that takes account of your life goals. Getting professional advice on how best to achieve these will enable you to benefit from your new wealth rather than suffer from it.