Autumn Statement predictions

Primrose

I missed the bit about bereaved spouses being allowed to invest what their spouse had done. Does this means they will be able to use their spouse's annual allowance as well as their own? Over time this will help mitigate the worst effects of losing a spouse's state pension and offen half of their occupational pension as well. A very welcome move in my view.

le_loup

I belive so, but only in the year of death. i. e. top up if 15k not all used.

Archi_Bald

I agree it definitely isn't a double allowance every year. I think it is a one off only

The autumns statement states:

1.219 150,000 married ISA savers pass away each year, and their ISA tax advantages die with them, even if they were saving as a couple. Autumn Statement announces that from 3 December 2014, if an ISA saver in a marriage or civil partnership dies, their spouse or civil partner will inherit their ISA tax advantages. From 6 April 2015, surviving spouses will be able to invest as much into their own ISA as their spouse used to have, on top of their usual allowance, and so will be better able to secure their financial future and enjoy the tax advantages they previously shared.

Later on it says:

2.62 Individual Savings Accounts (ISAs): transfer to spouses on death – The government will legislate to allow an additional ISA allowance for spouses or civil partners when an ISA saver dies, equal to the value of that saver’s ISA holdings on their date of death.

I think what they mean is that as of immediately, the new rules apply but that the surviving partner cannot actually use the extra allowance until the new financial year.

So if John passes away in the next couple of months and has £200K in his ISA on the day, Janet will be able to deposit £15,240 plus £200K into her ISA on April 6 2015. In subsequent years, Janet will again just have her personal allowance. (Not sure what would happen if John left a will saying his ISA should go to the dog's kennel...presumably a will will take precedence)

Presumably there will also be ISA transfer arrangements, which will be particularly important for S&S ISAs.

Thrugelmir

colsten wrote: »

Still very big change.

No cap on the amount you can hold in an ISA. I predict that CityWire will predict an ISA cap before the next budget........

What's coming in March though. If tax revenues do fall short as forecast. Then tax raising measures are a certainty.

Mattygroves2

Archi_Bald wrote: »

So if John passes away in the next couple of months and has £200K in his ISA on the day, Janet will be able to deposit £15,240 plus £200K into her ISA on April 6 2015. In subsequent years, Janet will again just have her personal allowance. (Not sure what would happen if John left a will saying his ISA should go to the dog's kennel...presumably a will will take precedence)

Presumably there will also be ISA transfer arrangements, which will be particularly important for S&S ISAs.

I doubt the transfer arrangements will be much worse than currently exist if someone dies with a share portfolio. The choices will be to sell and transfer cash or transfer in specie the same as they are now. There may be another form to fill in with NI number etc.

The fun bit will be how it is dealt with whilst the estate is in being administered - will any income be tax free in the executors hands ?

HarryD

How on earth would a £100K cap on ISAs work?

If you've got several ISAs is HMRC going to tot them up? Are you going to tot them up? No way HMRC could rely on every ISA holder doing that!

And what happens when your ISA(s) zoom to £110 during a boom? Do you have to add them up at the close of business each day and cash out any overage? Then what happens when the market falls and you're down to £90K?

Or maybe we all have to do a valuation and cash out on April 5th each year?

No, the whole idea of a cap is surely crazy?

Mattygroves2

HarryD wrote: »

How on earth would a £100K cap on ISAs work?

If you've got several ISAs is HMRC going to tot them up? Are you going to tot them up? No way HMRC could rely on every ISA holder doing that!

And what happens when your ISA(s) zoom to £110 during a boom? Do you have to add them up at the close of business each day and cash out any overage? Then what happens when the market falls and you're down to £90K?

Or maybe we all have to do a valuation and cash out on April 5th each year?

No, the whole idea of a cap is surely crazy?

Surely it will work in the same way as the pension one does. It is your responsibility to notify HMRC when you reach the value and then can no longer put funds in but can benefit from future gains and interest. It's easy enough for. HMRC to total your ISAs as providers have to do annual returns.

Archi_Bald

Mattygroves2 wrote: »

Surely it will work in the same way as the pension one does. It is your responsibility to notify HMRC when you reach the value and then can no longer put funds in but can benefit from future gains and interest. It's easy enough for. HMRC to total your ISAs as providers have to do annual returns.

One of the limits on pension is the maximum annual contribution you are getting tax relief on - - - - just as we have a maximum annual contribution to ISAs.

If you are talking about the total contributions made since 1999: I doubt any official place has kept statistics on who paid how much into an ISA since 1999, and no fair assumptions could be made.

If you mean an ISA limit could work like the LTA, have a look at how LTA is handled and then suggest how this would work for ISAs.

If you mean the limit should be on the amount held in ISAs, all the questions that HarryD asked would need to be answered, and they can't be answered.

The whole idea of an ISA lifetime limit is ludicrous.

Mattygroves2

Archi_Bald wrote: »

One of the limits on pension is the maximum annual contribution you are getting tax relief on - - - - just as we have a maximum annual contribution to ISAs.

If you are talking about the total contributions made since 1999: I doubt any official place has kept statistics on who paid how much into an ISA since 1999, and no fair assumptions could be made.

If you mean an ISA limit could work like the LTA, have a look at how LTA is handled and then suggest how this would work for ISAs.

If you mean the limit should be on the amount held in ISAs, all the questions that HarryD asked would need to be answered, and they can't be answered.

The whole idea of an ISA lifetime limit is ludicrous.

I meant the pension lifetime limit which is £1.25 million I think. That works on the market value of the funds and I can see an ISA one working in the same way. So you stop contributing when you reach that limit and it up to you to certify when that happens. It is easier to take money out of ISAs than a pension but there is no reason why it can't apply in the same way.

Clearly £100,000 is a ridiculous limit to apply but I could see £1 million or maybe £1.5 million working. So it will only impact those with big ISAs.

agent69

A 'cap' could work if you said that you can pay into the ISA provided it doesn't take you over the cap, but that if growth took you over the cap you wouldn't have to withdraw anything.

As for £100k, it does look like punishing the prudent saver. By all means make it £500k to hit the fat cats.