Quick answer
What are the 7 steps to take after receiving an inheritance in the UK?
- 1
Pause — avoid major decisions for 3 months.
- 2
Move funds to an FSCS-protected savings account or NS&I.
- 3
Confirm your tax position — IHT, Income Tax, CGT.
- 4
Clear high-interest debt for a guaranteed return.
- 5
Build the foundation — emergency fund, ISA, pension.
- 6
Invest the long-term remainder in a diversified portfolio.
- 7
Review annually and adjust as life changes.
Step 1 — Pause
Most UK financial professionals recommend not making major commitments for 3–6 months. Grief affects judgement.
Step 2 — Secure the funds
Move the money out of low-interest current accounts. Use FSCS-protected savings, cash ISAs, or NS&I — see short-term parking guide.
Step 3 — Confirm your tax position
Inheritance Tax is normally paid by the estate. Income, dividends and gains afterwards are taxable to you — see do you pay tax on inheritance.
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See what people in your situation usually doStep 4 — Clear high-interest debt
Credit cards, overdrafts and unsecured loans usually beat any savings rate. Mortgages need more thought — see our mortgage decision guide.
Step 5 — Build the foundation
- 3–6 months emergency cash
- £20,000 ISA contribution this tax year
- Workplace and personal pension top-up
Step 6 — Invest the long-term remainder
For money you won't need for 5+ years, build a diversified portfolio — see how to build an investment plan.
Step 7 — Review annually
Check progress against goals once a year. Rebalance if needed. Adjust for life changes.
Worth knowing
Common mistakes at each step
These come up repeatedly in UK financial planning conversations. Knowing them in advance helps you sidestep them quietly. For the full reference, read our UK Inheritance Mistakes Study Guide.
Acting too quickly
Major financial decisions made in the first weeks rarely age well. Most UK advisers recommend a 3–6 month pause before committing significant sums.
Leaving money idle for too long
Cash sitting in a current account loses value to inflation. After your initial pause, having a clear plan matters as much as having one at all.
Not considering the tax position
Inheritance Tax may be settled by the estate, but Income Tax, Dividend Tax and CGT can quietly affect what you do next. ISAs and pensions help shelter much of this.
Gifting without planning
Generous gifts can be brought back into your own estate under the 7-year rule. Annual exemptions and gifts from surplus income help give efficiently.
Educational · UK-focused
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See what people in your situation usually doWhere to read next
The expanded version lives in our complete guide.
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