Do We Wait to Apply for Probate

alowe49

With the recent death of my mother, all but her ISA revert to dad without need for probate - checked with HMRC. Proposed changes to probate fees may come into force this April and make it free to apply if the value is under £50,000. As the ISA continues to accrue interest it seems sensible to wait for the new charges to come int force before applying for probate.
Thoughts on this topic welcome

Yorkshireman99

alowe49 wrote: »

With the recent death of my mother, all but her ISA revert to dad without need for probate - checked with HMRC. Proposed changes to probate fees may come into force this April and make it free to apply if the value is under £50,000. As the ISA continues to accrue interest it seems sensible to wait for the new charges to come int force before applying for probate.
Thoughts on this topic welcome

You need to tell the ISA provider of the date of death since the tax advantage ceases at the point. Failure to do so can be regarded as fraud. The same with any bank accounts.

Keep_pedalling

It sounds like this is a cash ISA, so unless we are talking of a sum over the banks limit you probably don’t need probate at all, as YM says you must inform the provider, as the ISA has to be closed and any interest after death is taxable

getmore4less

From 2015 the value of ISA are transferable to spouse

FROM APRIL 2018 THE ISA is transferable to spouse.

There are a couple of rules you need to be aware of.

Keep_pedalling

getmore4less wrote: »

From 2015 the value of ISA are transferable to spouse

FROM APRIL 2018 THE ISA is transferable to spouse.

There are a couple of rules you need to be aware of.

Although cash ISAs have been really poor value for getting on for 10 years now so there is no real value of actually doing this unless the deceased held substancial S&Ss ISAs

Tom99

Keep_pedalling wrote: »

Although cash ISAs have been really poor value for getting on for 10 years now so there is no real value of actually doing this unless the deceased held substancial S&Ss ISAs

Surely its only worth doing if the survivor wants more money in an ISA, whether the deceased's ISA was large or small, cash or S&S makes no difference.

getmore4less

If the wrapper is there you try to keep it.

You then have the option to take it out or leave it invested


Have the ISA holder said they need probate to do the transfer?

noh

Yorkshireman99 wrote: »

You need to tell the ISA provider of the date of death since the tax advantage ceases at the point. Failure to do so can be regarded as fraud. The same with any bank accounts.

If the death occurred after April 2018 the ISA becomes a "continuing account of a deceased investor" and it's tax free status continues until the estate is administered or for three years whichever is sooner.
https://www.gov.uk/guidance/close-void-or-repair-an-isa-if-youre-an-isa-manager#dies-6april

Keep_pedalling

Tom99 wrote: »

Surely its only worth doing if the survivor wants more money in an ISA, whether the deceased's ISA was large or small, cash or S&S makes no difference.

The vast majority of people only want an ISA because they think the tax free status saves them money, whereas the reality is it costs them money. If it’s for the long term then yes transfer it and convert to S&S, if not cash it in and earn higher interest outside an ISA.

Every basic rate tax payer has a £1000 tax free allowance so unless you earn more interest than that your cash ISA is pointless as well as poor value. This situation may change if interest rates ever improve so it may be worth keeping larger ISA going, but anything under £20k can be put back into an ISA whenever you like as it is within your annual allowance.