Getting a Windfall – Things to Consider

Getting a financial windfall can be a life changing experience. The sudden arrival of a large lump sum of cash, be it unexpectedly – through a lottery win or an inheritance for instance,  or by design – when selling an asset, as an example – can be both exciting and disorientating. Here are some things to consider should you receive a windfall.


Don’t rush into anything. You are under no obligation to do anything with the money straight away. Don’t feel pressured to splash out on a purchase just because you can. Allow the initial euphoria to die down so you can make calm, informed decisions about your finances.


Think about your future and how you would like it to progress. If you wish to retire early or are concerned about providing for your retirement, your choices for what to do with your windfall are likely to differ from someone who already has a sizeable superannuation fund or a property portfolio.


There are several options for where to put your money. You may want to buy a property, but equally you may want to put the cash somewhere where it grows – perhaps for use later in life. There are different types of investment you could consider:

  • High interest bank account (the highest rates require you to lock your money away for a number of years as part of a term deposit).
  • Stock market investment (individual shares, funds, index trackers – all with different levels of risk).
  • Extra contributions to superannuation (which you will receive back tax-free)


If you win money playing the lottery or gambling, you do not have to pay any tax on your winnings. Likewise, any monies received through an inheritance do not attract any death duties. However, if you receive a windfall through the liquidation of an asset, you will need to put some of the money aside to pay capital gains tax. Situations in which capital gains tax may apply include:

  • Profit from sale of shares
  • Selling a house
  • Selling an item, even if the item was received as an inheritance

If you are fortunate enough to receive a financial windfall, avoid rushing into anything, consider your options, and you should be able to make the right decisions to make your money work hard to meet you desires.