Inheritance advice

[Joobles]

Good morning

I am in need of some financial advice!  I have inherited a sum of money, the first portion of which is currently in my bank account in the UK - sitting above the guarantee limit and not earning any interest!  I would like to bring it over here at some point and use it to buy property but as I don't yet have the full amount there is no rush to do so, and the exchange rate has of course just dropped.

My options as I see it are:

1. Leave it in the bank account and cross my fingers

2. Move it here regardless of the exchange rate so it starts earning interest

3. Put some of into our property which is currently let out, with a view to sell that property when we get the full amount.  This would have tax implications though (not sure if they would negate the benefits?) and if we couldn't sell that property we could end up having to get a more expensive mortgage in order to withdraw the money

Is this something that Vista would be able to help us with?

Many thanks

Julia

[Andrew from Vista Financial]

7 hours ago, Joobles said:

Good morning

I am in need of some financial advice!  I have inherited a sum of money, the first portion of which is currently in my bank account in the UK - sitting above the guarantee limit and not earning any interest!  I would like to bring it over here at some point and use it to buy property but as I don't yet have the full amount there is no rush to do so, and the exchange rate has of course just dropped.

My options as I see it are:

1. Leave it in the bank account and cross my fingers

2. Move it here regardless of the exchange rate so it starts earning interest

3. Put some of into our property which is currently let out, with a view to sell that property when we get the full amount.  This would have tax implications though (not sure if they would negate the benefits?) and if we couldn't sell that property we could end up having to get a more expensive mortgage in order to withdraw the money

Is this something that Vista would be able to help us with?

Many thanks

Julia

Hi Julia

This is not really a case that a Financial Adviser would take on as it is predominantly based on exchange rates (what's your view and where are you comfortable exchanging?) and whether or not a property may sell.

Option 1 - Potentially better outcome if the exchange rate improves in the future short-medium term;

Option 2 - Potentially better outcome if it doesn't improve BUT if it did it may not have to move too much in the short-term to outweigh the gain (particularly if it is a sizeable amount);

Option 3 - Could be a good strategy if the exchange rate improves in the future as it is likely the interest rate is higher on the mortgage than the interest you would get in a UK savings account (maybe even an Australian one depending on the mortgage rate), BUT as you say if you are reliant on this property selling to release the money then perhaps not such a good strategy (in addition to the potential tax liability to weigh up if you would otherwise be keeping it).

If you did not put it into the UK mortgage are the funds enough to enable you to purchase the Australian property when the full inheritance amount arrives?

If they are could you consider re-financing that mortgage to one that offers an offset (or switching products to an offset with the current lender) so you can park the money allowing it to be withdrawn without selling?

The above also does not factor in the potential growth (or short term loss) of the asset that you will be purchasing here with the money, for example option 1 might not be a good option after all if the asset you would have purchased in Australia grows better than the increase in the exchange rate you might have achieved while you have been waiting, if that makes sense.

Anyway hope this helps a little bit, obviously it doesn't give you THE answer but there's so many variables in the end to consider and the above are some of them.

Regards

Andy

 

  

[Joobles]

On 09/06/2017 at 17:34, Andrew from Vista Financial said:

Hi Julia

This is not really a case that a Financial Adviser would take on as it is predominantly based on exchange rates (what's your view and where are you comfortable exchanging?) and whether or not a property may sell.

Option 1 - Potentially better outcome if the exchange rate improves in the future short-medium term;

Option 2 - Potentially better outcome if it doesn't improve BUT if it did it may not have to move too much in the short-term to outweigh the gain (particularly if it is a sizeable amount);

Option 3 - Could be a good strategy if the exchange rate improves in the future as it is likely the interest rate is higher on the mortgage than the interest you would get in a UK savings account (maybe even an Australian one depending on the mortgage rate), BUT as you say if you are reliant on this property selling to release the money then perhaps not such a good strategy (in addition to the potential tax liability to weigh up if you would otherwise be keeping it).

If you did not put it into the UK mortgage are the funds enough to enable you to purchase the Australian property when the full inheritance amount arrives?

If they are could you consider re-financing that mortgage to one that offers an offset (or switching products to an offset with the current lender) so you can park the money allowing it to be withdrawn without selling?

The above also does not factor in the potential growth (or short term loss) of the asset that you will be purchasing here with the money, for example option 1 might not be a good option after all if the asset you would have purchased in Australia grows better than the increase in the exchange rate you might have achieved while you have been waiting, if that makes sense.

Anyway hope this helps a little bit, obviously it doesn't give you THE answer but there's so many variables in the end to consider and the above are some of them.

Regards

Andy

 

  

Hi Andy

Thanks for your response. I probably didn't make my question clear - I'm just trying to weigh up options and make sure I've considered everything.

Option 1: My understanding is that as a non-UK resident I won't be able to open a new savings account so I'm stuck with 0.5% for the account I have - is that correct?

Option 2: I know I can get an account with 3% interest but is there a better option than just putting it in a regular savings account? An account that requires notice would be ok as it might be 6 months - 1 year till I get the rest of my inheritance.

I like the idea of an offset mortgage, that could be a good option for us, would this be difficult to get as an expat?

Many thanks for your help!

Julia 

 

[Andrew from Vista Financial]

Sorry for the delay Julia

1 - I understand it is highly unlikely that you will be able to open a bank/savings account with a UK provider as an Australian Resident and new customer (although I can't speak for every provider), what about your existing bank (as an existing customer), perhaps worth exploring.

2 - 3% is around the best cash rates available so not likely you will get much better than this without taking some capital risk.

Getting a new mortgage as an expat is not easy but is possible, again the first port of call would be your existing lender to see if you could do a product switch (so still staying with them as a provider), failing that source a specialist Broker in this area, I may be able to give you a contact if you need.

regards

Andy

[Guest]

 Just a reminder to people that this is a partner forum for members to post and ask questions direct with our PIO partners.

This section is for people to liaise with Vista. 

Thanks in advance. 

 

 

[Joobles]

On 16/06/2017 at 15:32, Andrew from Vista Financial said:

Sorry for the delay Julia

1 - I understand it is highly unlikely that you will be able to open a bank/savings account with a UK provider as an Australian Resident and new customer (although I can't speak for every provider), what about your existing bank (as an existing customer), perhaps worth exploring.

2 - 3% is around the best cash rates available so not likely you will get much better than this without taking some capital risk.

Getting a new mortgage as an expat is not easy but is possible, again the first port of call would be your existing lender to see if you could do a product switch (so still staying with them as a provider), failing that source a specialist Broker in this area, I may be able to give you a contact if you need.

regards

Andy

Thanks Andy, that's helpful advice.