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Tisa lobbies for spouses to inherit Isa allowances

Tax Incentivised Savings Association says it would be “fairer” if widows and widowers inherited thair partner’s tax relief.

The Tax Incentivised Savings Association is calling for spouses to inherit the full Isa allowance of deceased partners and not just the balance.

Under current rules, partners can inherit the money held in an Isa but lose access to the tax relief.

In its Autumn Statement Tisa calls for the Government to allow full access to tax-free allowances for widows and widowers.

Tisa director general Tony Vine-Lott says a joint Isa is too complicated to create but the Isa represents a family asset that should be inherited along with the monetary value.

He says: “It would be fairer because Isas are household savings and not just the property of a single party, as is recognised by inheritance laws.

“The inheritance laws do not say if your spouse is the registered owner of the family home, or wrapper, it must be sold along with the contents, and the money handed over tax free while the spouse moves into rented accommodation.”

The Government came under fire last month for reportedly floating a £100,000 cap on Isa allowances, with advisers branding the move “ridiculous”.

Bloomsbury Wealth Management partner Jason Butler says: “It would be great to carry on the tax free allowances but is it reasonable? It does not incentivise anyone to save any more and the person who would have spent the money is dead. It is a bridge too far.”

Worldwide Financial Planning IFA Nick McBreen says: “To continue to attract tax relief upon death is a misnomer from the way the rest of the UK are taxed. This idea would be a ’nice to have’ but I cannot see it realistically happening because it would cost HM Revenue & Customs too much money.”

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