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Inheriting Isas

Journalist: Marc Shoffman, Freelance

ended 01. June 2023

I am writing a piece for the Daily Telegraph online about inheriting Isas and how they work.

I am keen to get comments about the actual process of inheriting the Isa from a deceased person and how easy it is.

People have complained in the past that staff knowledge of these accounts hasn't been up to scratch when contacting different providers - is this something financial advisers or other people helping with an estate have come across?

Also keen on insight about the best inheritance isa rates available.

 

 

 

 

4 responses from the Newspage community

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Petronella West
Chief Executive Officer at Investment Quorum
The government has introduced the ISA APS (Additional Permitted Subscription), which allows the spouse or civil partner of a deceased individual to inherit their ISA. Most stocks and shares ISA providers require probate to facilitate the transfer, and it must be done within 3 years of death or within 180 days of the completion of the administration of the estate, whichever is later. The ISA provider will need to see the will, the death certificate, and the probate documents before they will facilitate the transfer. As a financial adviser, my experience is that it is a minefield for beneficiaries due to the complex language used. Losing a loved one is already traumatic enough, and beneficiaries need more help and support during this time. My top tip is to always ask to speak to big organisations' dedicated bereavement teams, as they will have the right knowledge and expertise to guide you through the process. Call centres often don't have the necessary knowledge to assist you.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Only spouses or partners can benefit from your accumulated ISA upon death. They will receive a credit on their own personal ISA allowance to the value of your fund when you die. That way, it can be transferred across or sold down and an additional contribution made, attracting the correct smart status. Not all providers have to accept these inherited contributions and you only have a 3 year limit (or 180 days after the estate is wound up, if longer).
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Stuart Crispe
Founder at Sunny Avenue
I've completed the process through Lloyds Banking Group. It was seamless. A straightforward online form to complete. It didn't take long at all. The benefactor was also a Lloyds client with their own ISA. The funds were the quickest settled, moving across without the request for probate to the clients existing ISA.
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Tahina Akther
Barrister and Co-Founder at Wildcat Law
Inheriting an ISA from a spouse or civil partner should be straight forward but in our experience it is a lucky dip based on provider and often individuals working for them. The ideal would be to go to lawyers who understand the process and can take the admin problems away. However not everyone can afford to engage probate lawyers, or will choose to.
Many of those inheriting the ISA are elderly and very often their first port of call is their local bank or building society branch, assuming there is still one within a commutable range. They are often very upset at the loss of a loved one and the experiences they receive seem to be very mixed as the level of training in branches seems to vary significantly. However, those who have dealt with call centres usually report more difficulties, this is mainly due to the bereaved not understanding inherited ISA's and hence often "asking the wrong questions".