Key considerations

• You are not liable for inheritance tax — but CGT basis matters — IHT is paid by the estate, not the beneficiary, so you receive the net amount free of further inheritance tax. However, if you inherited assets rather than cash — shares, a second property, jewellery — the CGT 'base cost' resets to the probate value on the date of death. That step-up is valuable: if you sell those assets, you only pay CGT on gains since the date of death, not over the deceased's entire holding period. Don't crystallise inherited assets hastily before understanding this.
• There is no obligation to invest immediately — a high-interest account buys you time — The r/UKPersonalFinance community consensus is clear: don't make large, irreversible financial decisions while you're grieving. Parking the money in a Premium Bonds account (up to £50,000, tax-free prizes) or a top-rate easy-access cash ISA gives you 6–12 months of breathing room with no cost, no lock-in, and no decision you'll regret.
• Consider keeping it separate from joint finances — at least initially — If you're in a relationship, inherited money received in your sole name can remain 'non-matrimonial' property in the event of a future divorce — provided you don't mix it with joint accounts or use it to buy jointly-owned assets. This isn't about being secretive; it's about preserving optionality. Take legal advice if the sum is significant (£100k+) and your relationship situation is not certain.
• Spousal inherited ISA allowance: don't miss the APS window — If you inherited an ISA from a spouse or civil partner, you're entitled to an Additional Permitted Subscription (APS) equal to the value of their ISA — on top of your normal £20,000 annual ISA allowance. This must be used within three years of their death (or 180 days of estate administration completing, whichever is later). It's one of the most underused allowances in UK personal finance.

Frequently asked questions