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A number of changes to ISAs came into force on 6 April 2015. These included the ability to inherit ISA tax benefits from spouses and civil partners and an increase in the ISA allowances.
Where an ISA holder dies on or after 3 December 2014, their surviving spouse or civil partner is now able to inherit their ISA tax benefits. This is in the form of an additional permitted subscription limit equal to the value of the ISA at the holder’s death and is in addition to the survivor’s own ISA allowance.
So, if an ISA holder dies in May 2015, leaving an ISA valued at £25,000 at the date of their death, their spouse is entitled to an additional ISA allowance of £25,000. Where a cash subscription is paid, the spouse has 3 years from the date of death to use this and it can be paid in addition to their ISA allowance (2015/16 £15,240).
Spouses are entitled to the allowance even if the ISA assets are left to someone else in the will or are used to meet expenses from the estate. No one else is entitled to this allowance, even if they have received the assets from the ISA.
From 6 April 2015 the annual ISA allowances increased to £15,240. The Junior ISA allowance increased to £4,080.
For more information on our ISA please visit our ISA pages. If you have inherited an additional ISA allowance following the death of a spouse please contact customer services on 0345 54 32 600 for help with this.