New law: ISA savers reviewing wills so surviving spouses and civil partners can benefit from new ISA inheritance laws
Monday 11th May 2015
Savers with ISAs should consider making wills, or revising existing wills, to see if surviving spouses or civil partners could benefit from new ISA inheritance laws when they die.
An individual saver can save up to £15,240 (2015-16) per year in an ISA and does not pay tax on the income or capital gains it generates. Previously, the tax-free status of income or gains from an ISA ceased when the saver dies. Under new rules, a saver’s surviving spouse or civil partner will, in certain circumstances, be able to benefit from the saver’s ISA allowance when the saver dies.
Now, a surviving spouse or civil partner of an ISA saver who dies on or after 3 December 2014 can increase their own ISA allowance for the tax year in which the saver died, by an amount equal to the aggregate value of the deceased’s ISAs.
There are a number of conditions, some of which are strict – for example, the surviving spouse or civil partner must already have an ISA, managed by the same manager as the deceased - and time limits apply. There are also differences between the way cash ISAs and stocks and shares ISAs are treated.
Savers with ISAs should consider taking advice on whether their surviving spouses or civil partners could benefit under the new ISA inheritance laws, and making or revising their Wills accordingly.
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