Isa savings will keep their tax-free status when passed on to a spouse at death, the Government has announced in today’s Autumn Statement.
Chancellor George Osborne announced the Government will legislate to allow an additional Isa allowance for spouses or civil partners when an Isa saver dies, equivalent to the amount held in Isa savings on their death.
He said: “At the moment, when someone dies, the savings in their Isa lose their tax-free status and their spouse starts paying tax on that money.
“From today, I can announce that when someone dies, their husband or wife will be able to inherit their Isa and keep its tax-free status.”
The Government also announced it will consult on whether to allow crowdfunded debt-based securities into Isas and how this could be implemented.
Tisa operations director Carol Knight says: “Allowing the transfer of Isa assets to spouses and civil partners on death provides a fairer outcome, especially for women in retirement, and is one we have long advocated.
“Often a wife or civil partner will have savings in a husband’s name and can lose out significantly from the current rules. Allowing Isa savings to be transferable without leaving the Isa wrapper will enhance the greater flexibility introduced earlier in the year and act as a further incentive to save in Isas.”