Proceeds from house sale?

Question

My mum has just sold her house and has a considerable sum of money to place somewhere bearing in mind that the maximum safeguard limit in any one institution is £35,000 at the moment if a bank/ building society was to go bust. What's the best and quickest way for her to place the money in a protected place until she decides whether she is going to give any away to her kids (and hopefully live 7 years to avoid IHT)? The problem is that she is not mobile and cannot visit various places to open accounts easily and just needs a stop gap solution.

Answer 1

I agree with Sir Alan, even the queen has a bank account. Her money will be safe, stick it in Barclays.

Answer 2

Whilst I totally agree with previous answers in that the money will be more than safe in one of the big 4 banks as there's no way the govt will let them fail (they can't it would be a catastrophe for the economy), another option perhaps.....

As you've said this is just a stop-gap until things are sorted out properly, perhaps mum could 'lend' the kids (and/or whoever she trusts) 35k each. They put into their account... as the 35k guarantee is per person you spread the risk around.... it's a loan so no IHT to worry about... then in few days/weeks/months you all pay it back to mum (with the interest it's earned) and she gives what she wants to whom she wants as the gift you mentioned.

Obviously depends on the exact circumstances ... how many kids,  how much money... how much money the kids have in the bank already etc.... but just put it up there as an idea.

Would HIGHLY recommend a written note of the loan even if it is amongst family, but only needs to be an IOU signed by the person 'borrowing' the money... not a full legal doc.

Like I say .... just a thought.

Cheers

Answer 3

Tell her to gift some of it to her grandchildren. That way she won't pay tax on it and neither will they, she could put it in trust for them. That's if she has any of course

Answer 4

Banks don't go bust in this country, they are backed by the Bank of England and your money is secured and guarenteed