What happens to the ISA when the ISA holder dies?
- The date the executor(s) close it
- The administration of the estate is complete
- 3 years and 1 day after the date of death
Transfers: Additional Personal Subscription (APS)
If the ISA holder had a spouse or civil partner who was living with them at the date of death - (i.e. not separated) then the ISA may be transferred to them and is treated as an APS.
For example, if the deceased’s ISAs had £50,000 in them, their spouse or partner’s ISA allowance for the year would be £70,000 (the value of the transferred APS ISA and their own ISA allowance for the 2022/2023 tax year. (For Lifetime ISA accounts only £4,000 can go into the spouse/partner’s Lifetime ISA, the balance would need to go to other ISAs, such as cash, stocks and shares or IFISA).
- Not all ISA providers will accept an APS, some only accept them where they also held the deceased’s ISAs, some will only accept cash transfers and others will allow transfers of existing investments.
- The ability it transfer is subject to there not being any provision in the holder's will that would prevent this.
- If the transfer is to be 'in specie' that is the investment(s) are transferred rather than just cash, then the transfer must take place within 180 days of days of the distribution of the assets to the surviving spouse or civil partner.
- Simple Crowdfunding is not a tax adviser and the above is based on our understanding of the current tax rules. Independent advice is strongly recommended.
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