You've come into a large sum of money
Most money you inherit, win or are given isn't taxed when you get it, but what it earns can be. See the tax a year on each place it could go, least first.
Your answer
Enter the amount, where it came from and your income.
About this calculator
For anyone who has inherited, won, been given or been paid a large sum, and wants to know if it's taxed and where it would cost the least tax to keep.
We look at tax only. We can't tell you which account, fund or provider to choose: that's regulated financial advice, and a regulated financial adviser can help.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
First, the money itself. Inheritances, lottery wins and gifts aren't taxed for you. A pension lump sum is 25% tax-free and the rest taxed as income; redundancy pay is tax-free up to £30,000. On a sale, Capital Gains Tax may be due on the gain.
Then each place it could go. A route shelters what it can (up to £20,000 in an ISA, £50,000 in Premium Bonds, a pension up to your earnings and allowance, or the mortgage you owe) and the rest stays in savings. We work out the tax a year on that interest, on top of your income, and rank the routes, least tax first.
Pension tax relief and mortgage interest saved are shown with their route, but not counted in the ranking.
Worked example
Left in a savings account at 4%, your £100,000 would cost £600 tax a year; using the routes below together, it would be £0.
2026/27 tax year · £100,000 at 4% interest · income £40,000
| The money: an inheritance | £100,000 |
|---|---|
| Inheritance: no tax for you. Any Inheritance Tax is paid by the estate before you get the money. | £0 |
| What you have to put somewhere | £100,000 |
| Interest at 4% a year, on top of your income of £40,000 | £4,000 |
| 1. Use them together: tax a year | £0 |
| 2. Premium Bonds (£50,000, the rest in savings): tax a year | £200 |
| 3. Pay it into a pension (£32,000, the rest in savings): tax a year | £344 |
| 4. Put it in an ISA (£20,000, the rest in savings): tax a year | £440 |
| 5. Leave it in a savings account: tax a year | £600 |
| Pension: tax relief once, this tax year (not in the ranking) | £8,000 |
| Least tax a year: Use them together | £0 |
Worked out using HMRC's published rates for the 2026/27 tax year (6 April 2026 to 5 April 2027), on a yearly basis.
Questions people ask
Do I pay tax on money I inherit?
Not normally. Any Inheritance Tax is paid by the estate before you get the money. But the interest, rent or gains it earns after that are taxed as yours.
Is it better to pay off my mortgage?
If your mortgage rate is higher than what your savings earn after tax, paying it off usually leaves you better off, and there's no tax on interest you don't pay. Check your lender's charges for paying early, and keep some money you can get at.
Can I put it in my husband's or wife's name?
Yes, if it's a real gift: the money becomes theirs. Gifts between husbands, wives and civil partners are free of Capital Gains Tax and Inheritance Tax, and the interest is then taxed on their income.
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