ISA changes April 2015
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.
Surviving spouses inherit their partner’s ISA tax advantages when they die
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.
- The surviving spouse is able to use the additional allowance by topping up an existing ISA or opening a new ISA with an ISA manager of their choice.
- The subscriptions can be made to a cash or stocks and shares ISA, in cash or inherited non-cash ISA assets.
- There is a time limit in which the claim must be made. If the date of death is after 6 April 2015, the claim must be made within three years for subscriptions in cash and 180 days for subscriptions “in specie”. For deaths between 3 December 2014 and 5 April 2015, the 180 days will run from 6 April 2015.
Increase in ISA allowances
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.