ISA transfers upon a death

budgebudge

Sorry if this sound naive but we both have made out wills which upon one of us dying transfers everything to the surviving person (we are married) , and then ultimately to our son. Our concern is whilst everything we have is in joint names we hold sepearte ISA's waht happens to these accounts at the point of initially my detah, and then that of my husband. Is there problems with tax.

RayWolfe

They become taxable accounts upon death. ISAs are not transferable although the money in the account is.

lisyloo

The I stands for individual so the money has to come out of the ISA.

No inheritance tax is payable on first spouses death if it's transferred to the other spouse.

The money afterwards would not be protected from tax as it would have to come out of the deceased ISA wrapper.

On second death you would need to be careful that the total assets don't exceed the nil rate band as otherwise you'd have to pay inheritance tax.
I believe that trusts can be used to get round this but you'd need to get specialist advice on this if your estate is big enough.

budgebudge

Many thanks for the replies they are really helpful .