Clarkslegal LLP - Solicitors in Reading and London

Legal Updates

Inheriting ISAs

06 November 2015 #Private Client


ISAs are tax efficient wrappers that shelter investments from income tax and capital gains tax.  Previously, all monies or investments held in an ISA wrapper had to be transferred out of that wrapper on death before being transferred to a beneficiary.  That beneficiary then only had their personal ISA allowance available to them when reinvesting the funds previously held in the deceased’s ISA.

The government has recognised that many couples save from joint income and have changed the rules from the current tax year onwards.  The changes apply for deaths on or after 4 December 2014 and their effect is to give the surviving spouse or civil partner an ‘additional permitted subscription’ equal to the value of their late spouses ISA fund – provided they were living with their spouse at the time of death.

This additional allowance is only available for a surviving spouse or civil partner and must be used within either 3 years of death or (if later) within 180 days of the administration period ending.

Specific processes need to be followed and it is important to liaise with each ISA manager involved throughout the process to ensure that all requirements are complied with.  Extra care should be taken before arranging for any stocks and shares ISAs to be sold unless the surviving spouse or civil partner is certain that they do not want them.

The availability of this additional permitted subscription does not change the treatment of a deceased’s ISA on death.  When notified of death the ISA manager still has to remove the ISA from its wrapper from the date of death.

Clarkslegal, specialist Private Client lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Private Client matter please contact Clarkslegal's private client team by email at privateclient@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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