Unsure what to do with inheritance?

[eve_marie]

Bit of background: I (47,M) inherited my parents estate following the death of my mother a year or so ago. Probate has taken a long time to be resolved but I now find myself in the position of having a large amount of cash (350k) sat in a savings account with my UK high street bank, earning 3.3% AER.

I’m currently living and working in Thailand, with my partner and son and expect to return to the UK in 3 years time, when my son finishes his secondary education. I already own a house in the UK (value c.400k with 60k left on the mortgage) but expect to use some of my inheritance for home improvements. There is also the possibility of needing access to it to fund my son’s further education.

As I am not resident in the UK, then ISAs and fixed rate bonds are not available for me to use to grow the money (as far as I know? please correct me if wrong!).

What would be my best strategy for growing this money over the next three years? Thanks.

 

[zachgreenlee]

@eve_marie Hi,

You’re right in thinking that ISAs are not available to you, however even if they were then you’d run into issues around how much can be placed within an ISA (£20k per annum, £40k assuming you gift £20k to your wife and used her allowance too).

Offshore bonds are an option for you, and you don’t need to be UK resident for that, though you won’t be able to make the most of the tax advantages if you’re looking to cash it in 3 years.

You can invest just with a normal investment account, though this can result in capital gains liabilities if you don’t plan accordingly.

NS&I is also an option which will give you a superior return to cash (even using premium bonds), and could be a fit for you though it will not give the best return on your money (though it will be very safe).

I think this needs a conversation around what your long term plan is, both for returning to the UK, later life, estate planning, and how you really want to use the money - and unfortunately that’s not something we can easily do on Reddit.

I’m based abroad working with the expats now (I’m actually in Thailand in January funnily enough), though have been working in the UK financial services industry for 10 years - more than happy to introduce you to a couple of UK adviser firms who are used to working with expats if you’d like?

Happy to discuss further over DM.

 

[nhungthientai]

@eve_marie As I am not resident in the UK, then ISAs and fixed rate bonds are not available for me to use to grow the money (as far as I know? please correct me if wrong!)

I believe you may be mistaken. You still have UK bank accounts, so why cannot you simply open an ISA with one of the bank you already have an account with?

I assume you still have a UK passport, and a UK address (the house you own here), so you are very much British, just living abroad for now.

In fact, i think you may still be eligible to pay UK taxes even though you are in Thailand (check the hmrc criteria for this).

 

[sofie]

@nhungthientai You can’t open a ISA if you are non-resident

 

[nhungthientai]

@sofie Sure, but OP is a British national with an existing UK bank account and a UK property. He may be physically living abroad but for tax purposes he is very much a British taxpayer.

 

[issylostneedtobefound]

@nhungthientai ISA needs British Tax Residency

 

[nhungthientai]

@issylostneedtobefound Yes, thats exactly what I said here :

"He may be physically living abroad but for tax purposes he is very much a British taxpayer"

I live abroad for most of the year, but I pay my taxes in the UK. And I have an ISA.

 

[sofie]

@eve_marie It’s recommended thinking to only invest in equities if your saving horizon is 5 years and above. As you need the money in 3 years it might be too short term, so recommended thinking would be to stick to cash saving accounts.

If longer term then can invest in index fund trackers listed on the London stock exchange with a broker that accepts expats, such as Interactive Brokers, Swissquote or Saxo Bank.

Recommended to read Millionaire Expat by Andrew Hallam.

Be careful of financial advisors based in expat centres, most are just salesman selling insurance products disguised as investments riddled with high fees, most of the stuff is banned in the UK. Read the book and do it yourself with index funds.

 

[whitesunshinee]

@eve_marie Been mentioned before, but I would stick to investments that allow you to pull money out and don't tie you in for the long term. For part of my cash, I've used Revolut but it only allows 85k which is the protection limit and pays daily interest.

You probably could access certain fixed term bonds - there was one recently which was with Lloyds and you could access through Ardan platform.

Investments for Expats has a good website with blogs and a YouTube channel. Also based in Bangkok, they have done a few blogs about returning to the UK and recently about short-term fixed investments which might be worth a read.