[Closed] What to do with £150k?

A classic / not so classic car

Another house

Premium Bonds

Is the £150k after capital gains ?

House deeds passed on to family, reducing Inherit Tax if he lives a further 7 years, house then used or partially used (with him staying there) in exchange for monthly "rent"?

How much is his main, residential, house worth? If it's worth more and he was prepared to sell that and move into the rental property then he wouldn't pay CGT.

I realise that he may have emotional attachments to his current home or might wish to pass it on to you or siblings so this may not be an option.

He's relatively cash poor but asset rich.

He's worked out that £150k in the bank, spending £500 per month will last about 30 years.

Erm, spend it on living for the next 20+ years?

Travel the world staying in the best hotels eating the finest cusine.

Aside from coke and hookers

You've lost me.

As a couple have suggested I would put it in the bank (well BS for me) and spend it as needed to make the next twenty years fun.

At 70; stick it in the bank, spend it as needed.

If he's expecting to live another 30 years then maybe stick 15k per year for the next 3 years in a stocks and shares ISA and cash out in 10. Put another 15k into cash each year and that's 100k accounted for.

The remaining 50k he can leech for 16 years. In the interim he can cash out some of the other investments and rinse and repeat as necessary I guess.

I am not a financial adviser, it's just what I'd do at 70 if I expected to live that long.

He could buy the new Intense Tracer

I seem to remember reading about some "oldies" who'd worked out the costs and decided to basically live pretty much permanently on a cruise ship as it was cheaper than a residential home....

Thanks. So far you've reached the same conclusions as him/me, just spend the money living for 30 years (hopefully). I just wondered where to place the money he doesn't spend straight away for best returns for him and pretty safely as he has no more time to gain some.

He won't sell his main place, it's worth a lot more than the rental but he built it himself, as in dug out, laid the brick, finished it off himself, when he was 23 and has never moved. That will be our (me and sister) inheritance as long as it's not needed by him.

The passing the deeds and me 'renting' it back to him isnt gonna work I don't think as I haven't the lump sum he requires. Although will look more closely at this option too.

Aside from coke and hookers, what else should a near 70 year old invest £150k in for best outcome.

A shonky stepladder?

Either you or your sister can "steady" it.

Blazin-saddles - Member

Aside from coke and hookers, what else should a near 70 year old invest £150k in for best outcome

Shirley it depends on what he deems to be 'the best outcome'.
Does he want an income from it? An inheritance for his kids? To have some fun?

At that age, I'd be sorely tempted to buy a second-hand Lamborghini Gallardo lp570-4 Superleggera (in bright yellow), stick a tow bar on it & use it to tow a caravan.....

After buying a car and other toys for nearest and dearest...
Open S&S Isa and Dealing account with Hargreaves Lansdowne or similar. There are several trusts which pay divis of 6-7% with [i]relative[/i] safety. Assuming he invests £75k, leaving some in Premium bonds or high interest accounts, just in case, he should be getting an extra £5k a year tax free, without eating into or increasing his capital.

Bear in mind that the presumed 30 years of living costs will turn into 3 if/when he has to go into a home.

I think buy to let is still a good source of income. If he doesn't want the hassle, he should do a deal with his son. Form a partnership, he gets a regular income and no hassle, the son maintains the property, in which he now has a stake.

Speak to an IFA, I would.

PP 🙂

Best outcome would be some to spend, some to pay a bit of living costs for the long term to top up his pension. Nothing to leave for kids as it's his money and I want him to get to the end having done what he wants, not be afraid to spend anything just in case.

His main house (after taxes) will be our inheritance if she rs not had to be used, if it has then so be it.

I think buy to let is still a good source of income. If he doesn't want the hassle, he should do a deal with his son. Form a partnership, he gets a regular income and no hassle, the son maintains the property, in which he now has a stake.

I am the son in question, I can't afford a btl and haven't got a lump sum to give him as is the reason for selling the house.

 

Please can you furnishes me with your fahter's email address?

I am a Nigerian prince who needs to transfer some of my very rich fortune to The United Kingdum. If he gives me his bank account deetsils I can make him a very riches man.

Yours regally and in anticpationtion of your kindest actions,

HRH Prince Loadsa Wonga

Bear in mind that if he sells the house for £150k he may get much less than that after CGT. Talk to an accountant. They'll give you the tax implications of your options, and they'll charge less than you think. An IFA will want a hefty wack, and if on commission won't suggest keeping the house as there's nothing in it for him.

Maybe he should try and learn new skills and experiences?

You could suggest an intensive residential whistling course followed by a week's work experience with Harry the Spider?

He should go off on holiday somewhere hot and cheap - Thailand for example. Live like a king for the remainder of his life.

Bear in mind that if he sells the house for £150k he may get much less than that after CGT. Talk to an accountant. They'll give you the tax implications of your options, and they'll charge less than you think. An IFA will want a hefty wack, and if on commission won't suggest keeping the house as there's nothing in it for him.

Best advice so far.

Spend a bit on something nice and useful then the rest on something that will (complete nuclear holocaust aside) retain its value or better. Ideally something he sees a pleasure in and something that can be physically kept. When the time comes for it to be sold it can be turned into really cash so that he gets its all back and a bit more.

defo get a couple of scratchers.... and not them quid ones either, splash out on a couple of them fiver ones!

Sounds like an accountant or IFA is the way forward.

He doesn't want to buy something as an asset, he already has that in the form of a house. He's not an owning things man, he doesn't care for (classic) cars and pretty much has everything he wants already. He wants some money to spend on a new car (we're talking Focus not 911) and holidays then some to stick away, but be available as and when required.

At that age, I'd be sorely tempted to buy a second-hand Lamborghini Gallardo lp570-4 Superleggera (in bright yellow), stick a tow bar on it & use it to tow a caravan.....

Sounds like an accountant or IFA is the way forward.

An Accountant! Not an IFA. They give estate agents a good name!

A 10 year bond will pay 4% which is £500 a month without depleting the capital.

An Accountant! Not an IFA. They give estate agents a good name!

Second best advice so far 🙂

OP - sounds like he's pretty well sorted financially so best thing is to release the house back onto the market and let someone else have it who needs a secure home to live in... the housing crisis is very real and very painful for those on the wrong side of it.

He may have to pay tax but surely that's fair enough given that it'll be on capital gains only, so he'll simply be giving a proportion of a load of unearned wealth back to government to spend on health, roads, schools etc when the country badly needs it...

Worth looking at either a stock market investment focussed on income rather than growth or just a simple fixed term bond for lower risk...

Anyone who thinks BTL is worth it simply isn't paying attention... the law changes in April...

OP - sounds like he's pretty well sorted financially so best thing is to release the house back onto the market and let someone else have it who needs a secure home to live in... the housing crisis is very real and very painful for those on the wrong side of it.

He may have to pay tax but surely that's fair enough given that it'll be on capital gains only, so he'll simply be giving a proportion of a load of unearned wealth back to government to spend on health, roads, schools etc when the country badly needs it...

Worth looking at either a stock market investment focussed on income rather than growth or just a simple fixed term bond for lower risk...

Anyone who thinks BTL is worth it simply isn't paying attention... the law changes in April...

This is the most likely outcome, no problem with paying tax.

This is the most likely outcome, no problem with paying tax.

Good man. You're the first person in a number of years who's responded with any level of understanding to my argument that unaffordable housing is a crisis for all of us which needs sorting and that hoarding of a scarce essential resource in a time of crisis is a pretty unpleasant thing to do to other people..

Buy brant's airfix collection?

Give the house to you and your siblings.

Give the house to you and your siblings.

As much as I'd like his money, How does this provide him with income or readily available cash and a lump sum to buy his new car?

Well you and your siblings renovate, let and provide him with an income and enough to pay the loan on his new car.

Buy a nearly new car rather than new.

Stocks and shares isa and a bond.

Bikes, lots and lots of bikes.

Well you and your siblings renovate, let and provide him with an income and enough to pay the loan on his new car.

I have no desire to be a landlord, my sister hasn't got 2 quid to rub together so that won't happen. The rent would never cover a car loan as well as providing him the £5-600 a month he already gets from it. It's a £150 grand 2 bed semi.

Buy a nearly new car rather than new.

Tha's already a given.

Why not lease a car then? He could even chop it in after a couple of years if he doesn't prang it.

Most accountants deal with tax and cannot provide financial advice on investments since it's a criminal offence to give financial advice if you're not qualified and do not have the appropriate authority from the FCA, punishable by jail term.

IFAs no longer get commissions for investment advice and have to disclose fees before any advice takes place. These can be negotiated.

ISAs are not the be all and end all for older people as they are not IHT exempt, therefore any value will be included in the estate for tax purposes on death.

There are plenty of investments, lower risk, which will pay out roughly 3-4% pa. A trust could be bolted around them for protection purposes. These are the types of things that a GOOD IFA will be able to provide advice on. Don't go to a bank or a restricted adviser as that's where you might pay higher fees for a lesser service. Unbiased.com will give you decent advisers in your area. You could also purchase a guaranteed income option.

BTW I am not a IFA but do deal with them daily

So he's got a £150k house paid for and lives in one worth much more (also paid for )
But can't afford a new car ?

And he's 70?

Tell
Him to get an e bike (apparently you are allowed to buy them if you are old)

But can't afford a new car ?

What has 'afford' got to do with it?

Maybe he's smart enough not to line a dealers pocket just to fluff up his ego? A new car doesn't do anything else that a used one does.

Why not lease a car then? He could even chop it in after a couple of years if he doesn't prang it.

He'd never waste money like that! he's a pay 10 grand for a car and keep until scrap kind of guy.

What I was really trying to ask, is probably 'what's the best way to handle his money' As currently whilst he has plenty of money, it's all tied up in the 2nd house. He has a comfortable pension but no lump sum in the bank in case he wants a new car or a fancy holiday or whatever the hell he wants to spend it on, it's his money after all.

I think to be honest he's just getting a bit jittery as he had savings when he retired but recently he has spent a fair bit maintaining his main house, and worrying he's not got his cash crash net.

I don't want him to get to 85-90 wishing he'd done/bought things but didn't have the cash to do it when clearly he has got the cash. I don't want him to save it for the kids, I want him to have what he wants.

What I don't want however, is him to sell the house and keep it all in a current account not working for him.

I think we have the answer however. Sell, small lump goes in the bank to spend, lump goes into premium bonds or whatever as available funds and the rest into safe investments.

and thanks Julzm. You seem to have grasped what I was asking.

would it make sense to re-mortgage the second house? i don't know - i'm just asking.
the thing i would be wary of as well, is that if he has a decent chunk of money in the bank and ends up going in to residential care the bulk of that money will disappear VERY quickly, and i hate to say it, but at that age, it doesn't take much for someone who is fit and healthy to not be fit and healthy.

one way to solve the car thing is just go PCP. fully serviced new car every three years with some cash left over every month?

I remember taking my 95 year old Gran shopping for a new television and the chap was trying to sell her an extended warranty.

"and you think I'll be able to take advantage of that!" she says, he didn't know where to look 🙂

As we get older we spend less, seen it with my grandparents and now my folks. I'd second the either take out a loan against the property, and possible equity-release or look at gifting it to you two, and then the pair of you mortgaging it etc.

But, if it's currently rented out, surely they're already paying him a monthly rent?

IFAs no longer get commissions for investment advice and have to disclose fees before any advice takes place.

Completely coincidentally, the fees are calculated on [b]exactly [/b]the same terms as the commission used to be, and still come out of the investment value.

🙄

Believe me, I was there in the IT department for a [b]major [/b]financial services provider when we, to all intents and purposes, did a search for the word 'commission' in the code base, and did a replace-all with the word 'fee'. The rest of the industry did the same.

I second julzm's advice.

The assumption in your father's calculation about his future income is that inflation doesn't affect the value of his savings, which over 30 years is very unlikely to be the case.

There is a CGT relief for the period a house is the Principal Private Residence of the last 18 months, and any other periods, with the gain calculated on a pro-rata basis unless there's been a formal valuation.

It would probably be worthwhile moving into the house before selling it.

If the property is jointly-owned then there will be two CGT allowances.

Best speak to a tax accountant.

If your father sells, on a 30-year view he should hold a significant proportion of equities to ensure growth and inflation protection.

Most managed funds underperform the markets because of fees. ETFs attempt to follow the indices, and have low costs. The UK market is dominated by a small number of sectors, so perhaps a global ETF. Talk to an IFA if you need help.

Be careful about bonds as inflation is more likely to rise in the next few years than in the past, and it's a significant risk with bond yields so low. Especially with a 30-year view.

Possibly some gold for protection.

Bank account and short-term instruments are good for ready cash.

A shonky stepladder?

Either you or your sister can "steady" it.

Sometimes...

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He could burn it in front of a Tory Cambridge university student?