Cash ISA Closure penalty when deceased

GilGalceran

Mother has over £20000 in Halifax 3yr Fixed ISA Saver. I presume that if she died before it matured the 270 day Closure would apply. Other family members don't think the Closure penalty would be applied.
Does anyone know what the outcome would be?

growler834

I don't know about the Halifax but my Building Society deal with it as shown below

'A cash ISA will cease to qualify for tax exemption from the date of death of the account holder. If you die, interest earned will be treated as tax exempt until the date of death, but thereafter tax will
be deducted at the appropriate rate. When we receive notice of your death, we will close your cash ISA and transfer the balance to the Society's non-ISA product, which pays interest at the same rate
as the Society's Instant ISA, with tax deducted at the standard rate'.

getmore4less

Probably covered by these T&C's, which cover death

http://www.halifax.co.uk/isas/pdf/cash-isa-account-conditions.pdf





If you (or in the case of a junior cash ISA, the child) die, the tax free status of your account will end on the date of your death. Any interest the account earns from the date you die will have income tax deducted (currently 20%). Once we are notified of your death we will close your cash ISA, and pay any interest earned up to the date of your death tax free. We will transfer the balance to a new account on which interest will be earned at the same interest rate as our Everyday Saver accounts (for the equivalent balance), and whoever looks after your estate will be able to close that account. If we no longer offer Everyday Saver at the time, your account will pay interest at the same interest rate as an equivalent easy access savings account we offer at the time.

Galceran

It looks to be common practice that they do not apply a closure penalty. The question was raised when the Senior Family member wanted to transfer the Halifax 3yr to their 5yr paying 2.50%.
Thanks for that.

madbadrob

Notification of Death
In the event of your death, your personal representatives must notify the administrators in writing at the address above.

If your plan is in force when you die, its tax exempt status will end on that date but your plan will continue. When we have received evidence of your death which is satisfactory to us and we are asked by your personal representatives or any other person entitled to the shares, we will sell those shares and pay the proceeds (less any charges, fees and other money owed to us and the Revenue) to them by cheque. Until we sell the shares, they will be subject to daily price movements as normal. When we know who your personal representatives are, we will tell them the value of the shares in your plan as at the date of your death.

is taken from Lloyds banking group website who are the parent company of Halifax. So it seems they say they will take fees charges etc but no mention could I find about losing 270 days for fixed term isa's. It may be best to contact the bank itself

Rob

joerugby

madbadrob wrote: »

Notification of Death
In the event of your death, your personal representatives must notify the administrators in writing at the address above.

If your plan is in force when you die, its tax exempt status will end on that date but your plan will continue. When we have received evidence of your death which is satisfactory to us and we are asked by your personal representatives or any other person entitled to the shares, we will sell those shares and pay the proceeds (less any charges, fees and other money owed to us and the Revenue) to them by cheque. Until we sell the shares, they will be subject to daily price movements as normal. When we know who your personal representatives are, we will tell them the value of the shares in your plan as at the date of your death.

is taken from Lloyds banking group website who are the parent company of Halifax. So it seems they say they will take fees charges etc but no mention could I find about losing 270 days for fixed term isa's. It may be best to contact the bank itself

Rob

Rob, there are a few clues in those t&cs to suggest that they do not apply to a cash ISA

madbadrob

Joe, You may be right but the quote I took came from their page about cash ISA's. I know there are two ISA's one being cash one being shares and I took it as red that the t&c's would be the same for both. Have since looked again and I can only find the one I quoted above so I dont know what else to advise on this other than to contact the bank and ask for advice

Rob

getmore4less

As before seems to be covered here clear no penalty.

http://www.halifax.co.uk/isas/pdf/cash-isa-account-conditions.pdf


Once we are notified of your death we will close your cash ISA, and pay any interest earned up to the date of your death tax free

madbadrob

Until you read further down the page and find they say early closure of a fixed term ISA will incur penalty charges. There is no mention in this section as to what happens on death to these. Whilst I agree no penalty should be incurred because of death I would again advise contacting the bank itself and asking them for a definitive answer

Rob