Inheriting ISAs

Until recently, if someone died owning an ISA (Individual Savings Account) enjoying tax-free income and growth, that special tax status would be lost on their death. As a result of a change in the law, it is now possible for a husband or wife or civil partner to take over their other half’s ISA allowance, even if they did not inherit the ISA themselves. This means therefore that if, for instance, a person dies with £25,000 invested in ISA savings, their husband or wife or civil partner will be able to invest an additional £25,000 in an ISA above and beyond their own personal ISA allowance.

Generally speaking in most cases, this can be done within three years of death and it does not matter if a Grant of Probate has not yet been obtained in respect of the deceased person’s Will (or intestacy).

A specific form has to be completed (additional permitted subscription form) with the financial institution with which the deceased person held an ISA or ISAs (which may therefore mean filling out more than one such form if there were ISAs with different bodies) and this ISA allowance can be transferred to any other institution, so long as they accept ISA transfers.

If you are a surviving widow, widower or civil partner, it will therefore be important to find out whether your husband/wife/civil partner had any ISAs and to obtain and complete the relevant form to subscribe for their ISA allowance.

This is an excellent opportunity for tax-free investment which should not be lost. Please contact our Wills and Probate team on (01267) 237441 if we can help you with this and with ensuring that the various steps and processes involved in administering your loved one’s assets are properly carried out.