I go £8 million pounds in my bank account (due to inheritance) should I buy my dream house and car?

Too many people that come into money, don't spend it wisely and end up broke. First learn how to take care of what you have and don't spend it all. Spend very wisely but keep the main principal if you can. I assume you have to pay taxes on that amount too. That will eat into it in a big way. First invest your money very wisely and trust no one.

Yes. You'll still have enough left to live off the interest for life, even at today's terrible interest rates.

Yes. You only live once.

nooooooo. let it build interest. After 5 years untouched, you'll earn a little more than 1 million pounds, plus it'll give you plenty of time to decide what is worth spending it on.

Don't spend more than 2 million.

First, you should do some serious financial planning so that your money will last as long as you need it to, for the rest of your life. It will do you no good to have a fancy home and no way to pay the taxes on it, or pay for the maintenance and repairs. Get professional assistance from a trustworthy advisor. Make a budget. When you are finished planning for future needs, you will see what remains for other spending such as recreation, charitable contributions, educational expenses and purchases.