{"id":6517,"date":"2025-06-20T10:31:50","date_gmt":"2025-06-20T09:31:50","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/quilter\/?p=6517"},"modified":"2025-08-07T09:36:47","modified_gmt":"2025-08-07T08:36:47","slug":"an-introduction-to-receiving-a-windfall","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/quilter\/2025\/06\/20\/an-introduction-to-receiving-a-windfall\/","title":{"rendered":"An introduction to receiving a windfall"},"content":{"rendered":"<div class=\"hd-block hd-block-table\">\n<figure class=\"wp-block-table\"><table><tbody><tr><td>A windfall is a sudden and unexpected financial event that requires careful consideration and planning<\/td><td>This could be a lottery win, an inheritance, lifetime gift, large bonus or redundancy lump sum<\/td><td>From understanding tax implications to deciding how to invest to meet your goals, windfalls require careful planning<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/div>\n\n<div class=\"hd-block hd-block-heading\">\n<h2 class=\"has-x-large-font-size\">Contents<\/h2>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li><a href=\"#what-constitutes-a-windfall\">What constitutes a windfall?<\/a><\/li>\n<\/div>\n\n<div class=\"hd-block hd-block-list-item\">\n<li><a href=\"#what-to-consider-when-you-receive-a-windfall\">What to consider when you receive a windfall<\/a><\/li>\n<\/div>\n\n<div class=\"hd-block hd-block-list-item\">\n<li><a href=\"#handling-an-inheritance\">Handling an inheritance<\/a><\/li>\n<\/div>\n\n<div class=\"hd-block hd-block-list-item\">\n<li><a href=\"#received-a-large-bonus\">Received a large bonus?<\/a><\/li>\n<\/div>\n\n<div class=\"hd-block hd-block-list-item\">\n<li><a href=\"#selling-your-property-or-business\">Selling your property or business<\/a><\/li>\n<\/div>\n\n<div class=\"hd-block hd-block-list-item\">\n<li><a href=\"#top-tips-for-making-the-most-of-your-windfall\">Top tips for making the most of your windfall<\/a><\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p><strong>Throughout life, many things can have a significant impact on your financial needs and plans for the future, including receiving a sudden windfall. As your life journey progresses, you will need to adapt to an endless list of variables such as:<\/strong><\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li>Changes in personal relationships<\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li>property purchase<\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li>helping younger members of the family<\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li>business commitments<\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li>retirement<\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li>inheritance planning.<\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>The financial planning process will help to support you by ensuring that your financial plans remain relevant and on track for the future. Our conversations with you are expertly focused on all aspects of your goals, alongside our knowledge to help you stay on the best financial path for you.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>This guide focuses on <strong><em>Receiving a Windfall<\/em><\/strong>, a sudden and unexpected financial event that requires careful consideration and planning. Our specialist advisers are on hand to help you understand the tax implications of your windfall, advise you on how to best invest it to further your financial goals, and help you to review and adjust your existing financial plan to reflect your new circumstances.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>Financial advice after receiving a windfall could help you improve your lifestyle and reach your long-term financial goals.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-heading\">\n<h2 class=\"has-x-large-font-size\" id=\"what-constitutes-a-windfall\">What constitutes a windfall?<\/h2>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>The phrase \u2018windfall\u2019 is used to refer to a sum of money that is received suddenly or unexpectedly. This could take the form of a lottery win, for example, or more commonly an inheritance, lifetime gift, large bonus or redundancy lump sum.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>The receipt of what can be a life-changing sum of money can be challenging even for those who consider themselves to be relatively financially astute. From understanding specific tax rules relating to your windfall, to deciding how to best invest the proceeds to meet your financial goals, dealing with a windfall requires careful planning and consideration, which can prove stressful without professional financial advice.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-heading\">\n<h2 class=\"has-x-large-font-size\" id=\"what-to-consider-when-you-receive-a-windfall\">What to consider when you receive a windfall<\/h2>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>When you receive a large sum of money, it can feel overwhelming. The most important thing is not to hurry, but to take the time you need to think about what you want the money to achieve. You may wish to deposit your windfall into a separate savings account so that it can accrue interest until you decide what to do with it.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>Depending on your financial goals, you may wish to consider:<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li>Paying down debt or reducing your mortgage<\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li>Using your tax-free allowances to pay into an ISA and\/or pension<\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li>Building up an investment portfolio<\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li>Buying a property or investing in buy-to-let.<\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>Depending on the source of your windfall, there may also be tax to pay on the money you receive.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-heading\">\n<h2 class=\"has-x-large-font-size\" id=\"handling-an-inheritance\">Handling an inheritance<\/h2>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p><strong>If a loved one passes away and leaves you an inheritance in their Will, dealing with your windfall at an already emotional time may feel overwhelming. This is where professional financial advice can really help.<\/strong><\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>For example, there may be Inheritance Tax (IHT) payable on the money or assets you receive, depending on the size of your inheritance. IHT is currently payable at 40% on estates over the value of \u00a3325,000. The main residence nil rate band is currently \u00a3175,000 and applies when a residence is passed on death to a direct descendant, such as a child or grandchild. When added to the existing threshold of \u00a3325,000, this could potentially give rise to an overall allowance of \u00a3500,000 for those who are single or divorced, or \u00a31m for those who are married or in civil partnerships. Larger estates will find that residence relief is tapered. It will reduce by \u00a31 for every \u00a32 of value for estates valued over \u00a32m.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>IHT will usually be paid from the funds of your loved one\u2019s estate before you receive it, so there normally won\u2019t be any further tax to pay on your windfall once you receive it. Although there are some circumstances where this isn\u2019t always the case, so it is best to consult a financial adviser to fully understand the tax due on your inheritance and the best way of funding any potential IHT bill which may arise.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>If a loved one gifts assets while they are still alive, there will be no IHT to pay if they live for another seven years after gifting it to you. This is called lifetime gifting and is a common method of passing down assets tax-efficiently. However, it is best to put some money aside for a potential IHT bill in case your loved one were to pass away before the seven-year period has passed. IHT-free gifts can also be made, although these involve smaller sums \u2013 limits and conditions apply.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>It is advisable to place your inheritance money in a separate, easy-access and high-interest savings account while you take financial advice and decide what to do with it. The money will be protected by the Financial Services Compensation Scheme (FSCS), which protects \u2018temporary high balances\u2019 up to the value of \u00a31m for a period of six months.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-image\">\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" loading=\"lazy\" width=\"312\" height=\"384\" src=\"https:\/\/cdn.contentdeployment.co.uk\/wp-content\/uploads\/sites\/3\/2025\/06\/20102545\/image-2.png\" alt=\"\" class=\"wp-image-6518\" srcset=\"https:\/\/cdn.contentdeployment.co.uk\/wp-content\/uploads\/sites\/3\/2025\/06\/20102545\/image-2.png 312w, https:\/\/cdn.contentdeployment.co.uk\/wp-content\/uploads\/sites\/3\/2025\/06\/20102545\/image-2-244x300.png 244w, https:\/\/cdn.contentdeployment.co.uk\/wp-content\/uploads\/sites\/3\/2025\/06\/20102545\/image-2-300x369.png 300w\" sizes=\"(max-width: 312px) 100vw, 312px\" \/><\/figure>\n<\/div>\n\n<div class=\"hd-block hd-block-heading\">\n<h2 class=\"has-x-large-font-size\" id=\"received-a-large-bonus\">Received a large bonus?<\/h2>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p><strong>Receiving a bonus at work as a reward for a job well done is highly satisfying. But with bonuses subject to Income Tax and National Insurance Contributions, you face losing a significant portion of your hard-earned money. A bonus may even push you into a higher tax band, meaning that you receive an even smaller sum than expected.<\/strong><\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>One way to use your bonus tax-efficiently is through a process called \u2018bonus sacrifice\u2019. This is where you ask your employer to pay part of, or all, your bonus into your pension scheme as an employer contribution. Pension contributions benefit from tax relief at the highest rate of Income Tax you pay \u2013 so 20% for basic rate taxpayers and 40% or 45% for higher or additional rate taxpayers. e.g. a higher rate tax payer with \u00a35k of income taxed at the higher rate, making a \u00a315k gross contribution, will get higher rate relief on \u00a35k and basic rate relief on the other \u00a310k.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>You can contribute up to \u00a360,000 in total into your pension each year tax year (the current Annual Allowance). If you are a high earner, however (which is more likely if you receive large bonuses), your Annual Allowance may be reduced. For every \u00a32 of taxable income you earn over \u00a3260,000, your Annual Allowance is reduced by \u00a31, tapering down to a minimum of \u00a310,000.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>We can help you understand how to make the most tax-efficient contributions into your pension.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-heading\">\n<h2 class=\"has-large-font-size\">Or even won the lottery?<\/h2>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>We\u2019ve all dreamt about what we would do if those all-important numbers came up. While a bigger home, faster car and luxury holidays may have featured on your list, these may not be conducive to your longer-term financial goals. Taking a step&nbsp; back and thinking rationally about how the money you have won could be used to improve your lifestyle on a long-term basis will really help you to make the most of your new wealth.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>There\u2019s no need to take all the excitement and joy out of your lottery win, however! Allowing yourself a set percentage of your win for \u2018fun\u2019 spending will ensure you don\u2019t feel hard-done-by about investing the remainder sensibly.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>Remember, while lottery wins are in themselves tax-free, what you decide to do with it may be subject to tax. If you deposit your winnings in a savings account, you may have to pay tax on the interest accrued, while you\u2019re likely to be subject to Stamp Duty Land Tax if you purchase a home with your winnings. When you die, your beneficiaries may also have to pay Inheritance Tax on what is left.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p><strong>The value of investments and income from them may go down as well as up. You may not get back the original amount invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.<\/strong><\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-heading\">\n<h2 class=\"has-x-large-font-size\" id=\"selling-your-property-or-business\">Selling your property or business<\/h2>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p><strong>The proceeds of selling a property or your business can be substantial, but you will likely have to pay tax on the profit you make. Capital Gains Tax (CGT) is payable when you sell land or property that is not your home, such as a buy-to-let property, business premises, land or inherited property. The profit (or \u2018gain\u2019) is the difference between what you bought the property for, and what you sold it for.<\/strong><\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>When calculating CGT, taxable gains are added on top of your income; any gain falling within the basic rate band is taxed at 18% and any gain falling above the basic rate band is taxed at 24%.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>There are ways you can reduce the tax you have to pay. Firstly, there is a personal tax-free annual allowance before you have to pay any CGT at all, which is currently \u00a33,000. You can also offset any losses against your gains, reducing the amount of tax you pay. Another thing to consider is inherited assets which are subject to Inheritance Tax rather than CGT. In this case, assets are acquired at probate value and future CGT will be based on any increase in value since the date you inherited them.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-heading\">\n<h2 class=\"has-x-large-font-size\" id=\"top-tips-for-making-the-most-of-your-windfall\">Top tips for making the most of your windfall<\/h2>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p><strong>When you receive some unexpected money, follow our top tips for capitalising on your newfound wealth:<\/strong><\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ol type=\"1\"><div class=\"hd-block hd-block-list-item\">\n<li><strong>Don\u2019t spend it straight away<\/strong><\/li>\n<\/div><\/ol>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>Separate it from your regular income by placing it in a high-interest savings account. This will give you the time you need to consider your options.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li><strong>Take financial advice<\/strong><\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>Even if you know what you want to do with your windfall, professional financial advice can help you put a plan in place that will minimise tax and ensure your money is working hard for you.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li><strong>Understand the tax implications<\/strong><\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>We can explain the tax due on your windfall, and any strategies you can use to minimise it.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li><strong>List your short, medium and long-term financial priorities<\/strong><\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>In the short-term, you might be looking to pay off debts or build an emergency fund. A medium-term goal might be helping a child onto the property ladder or overpaying on your mortgage. While long-term goals are likely to relate to building up your pension for a comfortable retirement, for instance, or even buying a second home abroad.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-list\">\n<ul><div class=\"hd-block hd-block-list-item\">\n<li><strong>Treat yourself!<\/strong><\/li>\n<\/div><\/ul>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>While the majority of your windfall should of course go towards improving your lifestyle and meeting your financial goals, you may want to use some of it for fun. Once your financial plan is complete, you can set some money aside for that very purpose.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>Financial advice will help ensure you make the most of your windfall and meet your financial objectives.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-heading\">\n<h2 class=\"has-large-font-size\">We\u2019re here to help<\/h2>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p>If you have queries or would like to discuss any aspect of receiving a windfall, get in touch.<\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-spacer\">\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p><strong>Tax rates are based on current legislation and are subject to change.<\/strong><\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p><strong>Tax rates are based on current legislation for the 2025\/26 tax year, which is subject to change.<\/strong><\/p>\n<\/div>\n\n<div class=\"hd-block hd-block-paragraph\">\n<p><strong>It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.<\/strong><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>A windfall is a sudden and unexpected financial event that requires careful consideration and planning This could be a lottery win, an inheritance, lifetime gift, large bonus or redundancy lump sum From understanding tax implications to deciding how to invest to meet your goals, windfalls require careful planning Contents Throughout life, many things can have [&hellip;]<\/p>\n","protected":false},"author":19,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32],"tags":[86],"hd_content_source":[],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/posts\/6517"}],"collection":[{"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/comments?post=6517"}],"version-history":[{"count":3,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/posts\/6517\/revisions"}],"predecessor-version":[{"id":6887,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/posts\/6517\/revisions\/6887"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/media?parent=6517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/categories?post=6517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/tags?post=6517"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/hd_content_source?post=6517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}