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Tisa publishes guidelines on Isa inheritance rules

Tisa, the British Bankers Association and the British Societies Association have published guidelines to help consumers understand new rules which allow spouses to inherit Isa allowances.

In the 2014 Autumn Statement, Chancellor George Osborne announced Isa assets could be passed on to surviving spouses or civil partners.

The rules came into effect on 6 April and mean surviving spouses have an additional Isa allowance, known as an “additional permitted subscription”, equal to the deceased’s Isa savings at death, meaning Isa assets are passed on tax free.

In March, HMRC confirmed surviving spouses would not have to retain the same Isa manager as their deceased partner as the original proposals stated.

The guidelines outline details such as who is eligible for the new rules, that not all Isa providers will accept additional permitted subscriptions and the information required for application forms.

Tisa operations director Carol Knight says: “Approximately 150,000 married Isa holders die each year and so these changes will benefit spouses or civil partners of Isa holders who die on or after 3 December 2014 by increasing the amount that they can save by offering the tax advantages in an ISA wrapper.

“We see it as a much fairer outcome 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 under the previous rules whereby investments held by deceased Isa savers lost their tax-free status before they were inherited.

“Allowing ISA savings to be transferable without leaving the Isa wrapper will enhance the greater flexibility and will act as a further incentive to save within Isas.”

Read the guidelines here.


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