Inheritance tax and ISA
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slinga
Posts: 1,485 Forumite
It must've been asked before on here, but if an ISA portfolio is greater than the Inheritance tax limit by say £100,000 and the person holding the ISAs dies and the ISAs are cashed in, is Inheritance tax then liable to be paid?
It's your money. Except if it's the governments.
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ISAs are not exempt from IHT.0
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It must've been asked before on here, but if an ISA portfolio is greater than the Inheritance tax limit by say £100,000 and the person holding the ISAs dies and the ISAs are cashed in, is Inheritance tax then liable to be paid?
ISAs lose their tax-exempt status when the holder dies. The money / assets in the ISA form part of the deceased's estate just like any other money or assets, and any inheritance tax is charged on the whole estate, after allowances.0 -
But a spouse or civil partner is allowed to inherit the value of those ISA holdings at time of death and continue to keep this as a tax free ISA allowance (as well as their own allowance) although I think the money has to be reinvested in ISAs within three years. Somebody will doubtless correct me if i'm wrong.0
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But a spouse or civil partner is allowed to inherit the value of those ISA holdings at time of death and continue to keep this as a tax free ISA allowance (as well as their own allowance) although I think the money has to be reinvested in ISAs within three years. Somebody will doubtless correct me if i'm wrong.
If the estate (or the relevant part of it) is being passed to a surviving spouse, then no IHT applies anyway, regardless of whether the money was within an ISA umbrella or not, under the spousal exemption.
If the ISA money isn't going to a surviving spouse then it does count towards IHT in exactly the same way that non-ISA money would.0
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