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HMRC unveils inherited Isa rules

HMRC has revealed details of new rules for transfers of Isas between spouses, including allowing recipients to change managers on savings.

Chancellor George Osborne announced reforms to allow for Isas to be passed between civil partners after death as part of December’s Autumn Statement.

Rules had originally proposed that a surviving spouse would be required to use the same Isa manager as their deceased partner, but HMRC has now confirmed this is no longer the case.

In addition, spouses will be given an additional, one-off Isa allowance equivalent to the value of the deceased’s savings to enable them to move assets into an account in their own name.

Hargreaves Lansdown chartered financial planner Danny Cox says: “This provides a much more flexible solution and a sensible approach.

“The spouse will now have the option to change to a different type of Isa, cash or stocks and shares and change providers if they wish. The principle here is that family money held in separate Isas can now retain their tax efficiency on death.

“The process is a little clunky but as a short term fix makes a lot of sense. Phase two will provide a smoother process where the Isa status is effectively retained on death.”


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There is one comment at the moment, we would love to hear your opinion too.

  1. For my money this is the best new proposal to come out of Westminster in the last couple of years. Unlike all the other daft initiatives surrounding pensions, this will actually save tax.

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