Coming in to a large amount of money is not something that happens often in a person’s lifetime. You may be tempted to spend, make gifts, give up your job or pay off existing debts and loans, but taking time to consider your options will put you in the best position for your financial future.
Don’t feel you have to take action straight away. Taking time to take in impartial advice about your new-found money will give you all of the options you need to make an informed decision that can potentially reward you well in the future.
The short term
Consider setting yourself up with a savings account that you keep separate. This may benefit you whilst you are deciding how you should deal with your money in the long term.
If you are considering investing your money, it’s important that you seek impartial financial advice so that all options are laid out for you. Independent Financial Advisers (‘IFA’) are not tied to any specific providers, which means that all advice provided to you is in your best interests only.
Financial planning begins with fully understanding where you are with your finances. It’s important to take time to understand all of your outgoings and incomings, so that you can see how your windfall fits in with your circumstances, and what level of risk you are willing to take if you choose to invest your money.
If you choose to receive advice from an IFA they will tell you what your options are, advise you on how best to proceed, and keep you informed at every stage so that you remain in control.
If you received a bonus at work, your employer will usually deduct tax and National Insurance from it on your behalf.
If you received money from an inheritance, then in most cases the tax is paid with funds from the deceased person’s estate. This will usually mean that by the time you receive your inheritance, you won’t need to pay any Inheritance Tax on it.
If you’re lucky enough to have received a lottery win, then these are not considered to be an income and are not taxed. Read more in our blog about lottery wins here.
Other categories including shares may be subject to Capital Gains Tax (CGT) if they have increased in value. Whilst there is a tax-free allowance – you can find out more by checking the GOV website.
Your IFA will give you a full breakdown of applicable taxes depending on your circumstances.
Talk to Beaumont about how we can help you to make investment decisions that are right for you. Call us on 01691 670524 to arrange an appointment for a free initial Independent Financial Review with one of our advisers.