Tessas - Were they Transferrable?

Paul_Varjak

I do tax returns for family and friends so I do not normaly deal with Tessas.

One lady I do the Tax Return form for has a TOISA in her name, but she said it was transferred from her husband's name into hers.

I think the transfer probably happened on her husband's death and I think this was while it was still a TESSA (rather than a TOISA).

Can anyone tell me whether TESSAs were transferrable without losing their tax-exempt status?


PAUL VARJAK

isasmurf

Hmm... that's a very good question.

It seems that they weren't.

What happens if I die before the end of the five-year period?
No tax will be charged on the interest paid up to the date of your death, but the account cannot continue as a TESSA after that date and any interest paid after that date will be taxable.

Paul_Varjak

SAVER SMURF:

Do you know if TESSAs were transferrable before death and not lose their tax expemt status?

I know you cannot do it with ISAs/PEPs. Just not sure about TESSAs.

Thanks again!


PAUL VARJAK

Milarky

A Tessa could not be held in joint name - just like ISAs. On death, the Tessa/ISA forms part of that person's estate and [unlike joint savings-accounts] can't transfer to the 'joint-named' because there can't be any. And the 'allowance' aspect is lost too. The proceeds of the closed account will be transferred but revert to taxable savings, as you would expect.

Paul_Varjak

Thank you Milarky. I thought that was the case but, from what she tells me, it seems that the transfer was made to her name. It certainly is a TOISA now!

Will have to leave it to her to decide what to do.