Q. I have recently left my senior management position in London and purchased a property in France where I plan to reside. Upon selling my home in London, I expect to have approximately £500,000 at my disposal. Although I am currently on a work hiatus, I plan to pursue consultancy work in the future. I am married, have adult children, and possess a pension fund amounting to £200,000. What options do I have for managing my cash?

Due to changes following Brexit, UK-based advisers can no longer provide services to clients moving to the EU. Therefore, it’s advisable to seek out a firm that is authorized to offer advice in both the UK and France. Consulting an accountant who understands the complexities of UK and French tax regulations would also be beneficial, particularly since the French tax system may not recognize UK tax-efficient accounts like ISAs.

At Killik & Co, we suggest a “three pot strategy” for savings and investments. The first pot should serve as an emergency fund, ideally containing three to six months’ worth of living expenses, and should be kept in a readily accessible cash account.

The second pot is intended for any expected large expenses, such as a vehicle purchase or home renovations. Any surplus funds after these two pots can then be strategically invested, depending on your financial objectives.

Generating Investment IncomeIf you are on a break from work, you may need your investment portfolio to provide a source of income. On the lower risk spectrum, consider a portfolio composed of government and corporate bonds, which involve lending to governments or companies in exchange for a fixed interest rate.

A portfolio of bonds could yield annual returns between 4 and 6 percent; however, the capital growth potential may be limited. Consequently, if you withdraw all the income, the capital value may not keep pace with inflation. Exploring alternative assets like commercial real estate and infrastructure funds can offer both income and capital growth.

On the higher risk side, equities have been known to yield better returns than other asset classes, albeit with higher volatility. A globally diversified equity portfolio might generate an income yield of 1 to 2 percent annually while providing substantial long-term capital gains.

Consideration of Currency RiskIf you plan to establish residency in France, converting a portion or all of the £500,000 into euros could be advisable. In recent months, the pound has appreciated against the euro, with the exchange rate moving from 1.15 to 1.20. In terms of investments, there are reputable euro-denominated companies like SAP and ASML in technology, as well as L’Oréal. The major 11 companies in Europe, dubbed the Granolas, are viewed as comparable to the prominent tech stocks in the U.S.

Planning GiftsIf part of your financial strategy includes gifting to your adult children, doing so shortly after receiving the proceeds from your home sale could be an opportune moment. Such gifts are considered “potentially exempt transfers” for inheritance tax, meaning they could be excluded from your estate after a period of seven years.

Expert insights from Rachel Winter of Killik & Co.