Inherited money from Canada, but live in UK?

Question

My dad died recently and has left myself and siblings quite a bit of money. Once the estate is settled and the checks sent out, what do I do with the money with regards tax. I have to fill in a canadian form and i know i do not have to pay canadian taxes on it. But putting a large sum in a UK bank that is inherited, what do I have to do? I am on incapacity benefit at the moment as well and have no bank account. Obviously I need to tell the dole office - but what else do I need to do? I will not have had this amount of money before and don't want to just blow it like so many horror stories I have heard. Can someone take me through the process of what to do or give some tips? Many thanks

Answer 1

There is no tax on the inheritance itself, though you might find that you also get a share of the income that arose to the estate after your father's death: that is taxable, if your total income goes over the personal allowance of £5,435 (to be increased to £6,035 in October).  If you do get enough income to be liable to tax you should tell your local tax office so that you don't find yourself with a built up bill a few years on.

You ought to open a bank account to deal with your money.  There is not much to choose between them, though the ones which are or were Building Societies are usually a bit more helpful and friendly towards individuals - Nationwide seem pretty good, and I found the staff at my local Halifax helpful.  You will have to prove to them who you are and where your money has come from - a letter from the Canadian lawyers about your inheritance should do the trick.

The bank will also give you advice on how to invest your money - but remember they have their own savings plans to "sell" and it may be that you can get a better deal elsewhere.  If the amount is large enough you would be wise to consult an independent financial adviser.  A test of independence is to as how much commission he will get if you invest in one of his suggestions!

Most importantly, don't go on a spending spree!  There will be a few things you will rightly want to buy that you have not been able to afford, but remember that if the money is to last you, it needs to be invested so that you spend only the income it produces.