What should i do with an inheritance?

[mkjuk]

I'm set to inherit �200k. I would like some advice on how to invest this as tax efficiently as possible whilst still acheiving some capital growth. I would like to include some element of investment into a portfolio of shares.

I have two 18 yr old sons but do not belive that it is neccessary to set aside any money for them at this stage.

My house is worth �275k with a mortgage of �180k and �18k left to pay. There are no early settlement penalties.

Should i pay off my mortgage and how can i invest money tax efficiently?

Please help!

[Buenchico]

I hope that this post doesn't seem too negative but, despite the vast collective knowledge available on Answerbank, I feel sure that you ought to be engaging the services of a professional to guide you.

I suggest finding a (genuinely) independent financial adviser. The best way to do this is to select an adviser who works on a 'fees only' (rather than fees and/or commission) basis. Of course this means paying money 'up front' but a few hundred quid spent now could make you tens of thousands of pounds in the future. (So perhaps I'm really guiding you towards the best investment of all?)

You can find a suitable specialist by using the search facility here:
http://www.unbiased.co.uk/aifa/input.asp?area=consumer

Just one personal thought: I've heard consumer programmes (like Radio 4's 'Money Box') suggest various reasons why it's not always a good idea to pay off your mortgage. Having done so, however, I can tell you that the feeling experienced when you finally get rid of the 'millstone around your neck' is worth a hundred times the minor financial losses!

I apologise if this post isn't really what you wanted but I genuinely believe that the best advice that any of the regular AB team can give you is 'Consult an expert!'

Chris

[Miss Zippy]

I agree with Buenchico, you really need to engage the services of an Independent Financial Adviser (�IFA�). An IFA will need to draw up a detailed profile of you and your circumstances (including whether you are a cautious investor or an adventurous investor/basic or higher rate taxpayer/do you have a CGT liability etc) before they can advise you and this is something people on here, irrespective of their knowledge and qualifications, simply cannot do. With �200k to invest, you have a lot of opportunities open to you, such as offshore investment schemes and property syndicates/partnerships, all of which usually have minimum investment levels of around �25k. An IFA will be able to explore all avenues open to you, taking into account your tax and personal circumstances etc. With regard to paying off your mortgage early, my own personal opinion is that everyone should strive to pay off their mortgage as quickly as possible and most IFAs (in my experience) will advise the same.

[jason1980]

Im an Accountant and if I was to inherit �200K I would buy a reasonable property outright and rent it out to receive a monthly income whilst still owning the property as an asset which would more than likely raise its value in time with current house prices. Income would be taxable under a basic self assessment to declare it with all other income received and tax paid through your PAYE wages.