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ISA rule changes benefit married couples

View profile for Heather Varley
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New measures were announced in the Chancellor’s Autumn Statement concerning the inheritance of Individual Savings Accounts (ISA’s). This could save married couples (or civil partners) thousands of pounds but it may be necessary to update your Will to benefit from this.

Before 4th December 2014 the tax free incentive that made ISA’s so attractive to savers was lost after death and the surviving spouse was liable to pay income tax on any income or returns from the money in the ISA. The surviving spouse will now be given a one-off allowance equalling the deceased’s ISA holding. This will enable them to ‘re-shelter’ assets which were in a spouse’s ISA into an ISA in their own name.

This change does not affect or save Inheritance Tax. The value of ISA’s are subject to Inheritance Tax on death – there is one exception to this and that is where ISA investments qualify for business property relief. Transfers of any assets between spouses on death are free from any Inheritance Tax.

Heather VarleyWills & Tax Associate says, “These new rules are likely to make ISA’s more appealing to investors. However, to benefit from this new tax break it would be wise to review your Will to ensure that that ISA’s are left to each other.”

If you would like to review or update your Will or have any questions about estate and tax planning our experienced legal team would be happy to chat to you.

We have offices in the Christchurch, New Milton and the New Forest. Our Wills & Tax team also cover Bournemouth and Poole. For a free initial chat, please call 01202 499255 and Heather or a member of the team will be happy to discuss any questions that you may have.

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