Receiving a windfall

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Receiving a windfall

Receiving a windfall

Life throws many things at you which can have a significant impact on your financial needs and plans for the future.

The phrase ‘windfall’ is used to refer to a sum of money that is received suddenly or is unexpected.

When you receive a large sum of money, it can be very overwhelming. But the most important thing is not to rush, take your time to think about what you want to achieve with the money you have received. Depending on your financial goals, you may wish to consider:

  • Reducing your debt/ paying a significant chunk off your mortgage.

  • Using your tax-free allowances, to invest into wrappers such an ISA and/or pension.

  • Building up an investment portfolio.

  • Buying or a property or investing into a buy-to-let property.

Depending on the source of your windfall, there may also be tax to pay on the money which you receive.

Different types of windfalls


Should a loved one die and leave you with an inheritance in their will, dealing with this at an already emotional time may feel overwhelming. Inheritance Tax may have already been paid. If the deceased’s estate is over £325,000 then Inheritance tax of 40% is due on any monies above this limit.

Receiving a large bonus

Although satisfying, bonuses are subject to both Income Tax and National Insurance Contributions, meaning you face losing a large proportion of your hard-earned money. Bonuses can sometimes push you into a higher tax bracket, meaning you will receive an even smaller amount of money than you expected.

Selling your property or business

The proceeds when selling a second property or business can be substantial, with the likelihood of paying Capital Gains Tax on the profit you make.

Top tips for making the most of your windfall

1) Don’t spend it straight away.
2) Take financial advice.
3) Understand the tax implications.
4) List your financial priorities over the short, medium, and long-term.
5) Treat yourself!

By taking financial advice, you can ensure you make the most of your windfall and meet your financial objectives. If you wish to discuss your options with one of our advisers, please get in touch.