Questions re. ISAs following bereavement

itm2

I am handling the estate of my late father, transferring his assets to my mother. Now that I have the Grant of Probate I have a couple of questions regarding 2 ISAs which he held:
(1) My father had a Virgin Money S&S ISA which was worth £14,000 at the date of his death last December. Virgin Money were advised of this death at the beginning of January. Today it is worth around £12,000. Is there any alternative but for my mother to accept the loss in value in the last few months, or is there any way that she can recover the value of the fund at the time of my father's death?
(2) My father had another S&S ISA with Barclays. I requested closure of this account, and Barclays have sent the proceeds to me as a bank transfer. Is there any way that my mother can re-use the ISA allowance associated with this account via an APS ISA account, or is it too late now that Barclays have closed my fathers's account and transferred the cash to me?

jonesMUFCforever

1) Stock and shares go up and down daily. They could have gone up!
The shares could not have been sold or transferred until Grant of Probate. I know cash ISA's can be transferred to a spouse without losing the tax free warapper and assume the same can be done with S&S ISA.
2) IMO (I am not a legal person) once Barclays closed the account - that's it. You requested closure (rather than a transfer??) that is what they did. Had they delayed or questioned your instruction could those funds have also reduced in value?

eskbanker

jonesMUFCforever said:

I know cash ISA's can be transferred to a spouse without losing the tax free warapper and assume the same can be done with S&S ISA.
2) IMO (I am not a legal person) once Barclays closed the account - that's it. You requested closure (rather than a transfer??) that is what they did. Had they delayed or questioned your instruction could those funds have also reduced in value?

I don't believe that ISAs can actually be transferred as such from a deceased spouse to survivor, but the latter simply receives an extra subscription allowance equal to the value of the deceased's ISAs.

https://www.gov.uk/guidance/manage-additional-permitted-subscriptions-into-an-isa

Torry_Quine

eskbanker said:

jonesMUFCforever said:

I know cash ISA's can be transferred to a spouse without losing the tax free warapper and assume the same can be done with S&S ISA.
2) IMO (I am not a legal person) once Barclays closed the account - that's it. You requested closure (rather than a transfer??) that is what they did. Had they delayed or questioned your instruction could those funds have also reduced in value?

I don't believe that ISAs can actually be transferred as such from a deceased spouse to survivor, but the latter simply receives an extra subscription allowance equal to the value of the deceased's ISAs.

https://www.gov.uk/guidance/manage-additional-permitted-subscriptions-into-an-isa

No they can be transferred. My husband's was transferred into my name when he died.

eskbanker

Torry_Quine said:

eskbanker said:

jonesMUFCforever said:

I know cash ISA's can be transferred to a spouse without losing the tax free warapper and assume the same can be done with S&S ISA.
2) IMO (I am not a legal person) once Barclays closed the account - that's it. You requested closure (rather than a transfer??) that is what they did. Had they delayed or questioned your instruction could those funds have also reduced in value?

I don't believe that ISAs can actually be transferred as such from a deceased spouse to survivor, but the latter simply receives an extra subscription allowance equal to the value of the deceased's ISAs.

https://www.gov.uk/guidance/manage-additional-permitted-subscriptions-into-an-isa

No they can be transferred. My husband's was transferred into my name when he died.

I think this is a semantic issue - the net effect may be that the contents of the deceased's ISA ends up in an ISA held by the surviving spouse but it's not literally an ISA transfer in the usual sense of the term, i.e. OP closing the deceased's account doesn't jeopardise the process (as it would for an actual ISA transfer), and hence "There is no need to agree a ‘transfer’ date as the underlying ISA is not being transferred".

itm2

eskbanker said:

I think this is a semantic issue - the net effect may be that the contents of the deceased's ISA ends up in an ISA held by the surviving spouse but it's not literally an ISA transfer in the usual sense of the term, i.e. OP closing the deceased's account doesn't jeopardise the process (as it would for an actual ISA transfer), and hence "There is no need to agree a ‘transfer’ date as the underlying ISA is not being transferred".

So do you think my mother would still be able to use my father's ISA allowance from his Barclays ISA, which is now cashed in?

Robert_McGeddon

itm2 said:

So do you think my mother would still be able to use my father's ISA allowance from his Barclays ISA, which is now cashed in?

I'm seeing conflicting information:

1 At https://www.hl.co.uk/investment-services/isa/additional-permitted-subscription-aps the suggestion is that the ability to use an APS ceases once the funds are withdrawn from the deceased partner's account.

2 At https://www.gov.uk/guidance/manage-additional-permitted-subscriptions-into-an-isa#info-dec I see no such restriction - but the document is long and I may have missed it.

I suggest you ask Barclays - you have nothing to lose. Quote link #2 if you like. then it's down to them to say why it can't be done.

eskbanker

Robert_McGeddon said:
I'm seeing conflicting information:

1 At https://www.hl.co.uk/investment-services/isa/additional-permitted-subscription-aps the suggestion is that the ability to use an APS ceases once the funds are withdrawn from the deceased partner's account.

I'm not seeing this suggested in that document, could you highlight specifically where it says or implies that?

itm2 said:
So do you think my mother would still be able to use my father's ISA allowance from his Barclays ISA, which is now cashed in?

Yes, that's my understanding - that part of the APS is set at the value of that ISA at the point of closure, which will be added to the value of the other one at a later stage.

crikaus

Currently going through this myself for family 
It is possible to transfer existing ISA from dead partner using APS allowance, that is the value of dead partners total isa at death. 
It is possible to do in specie as long as the survivor opens up account with the existing ISA platform, if they want to move investments to new platform it's as cash only. Though if they moved it in their name via in specie, once it's in the survivors name surely they can move to a new platform?
The final value of the continuing ISA is the higher value at death or when the isa is closed.
If the value falls below death value, i believe it can be topped up to the death value by the survivor.

To the OP one can transfer their APS value to another platform, but if it's gone in the in a bank account, so I would assume it's lost it's isa status, though others seem to think differently, good luck with finding someone at Barclays who knows the rules of this! 

eskbanker

crikaus said:

To the OP one can transfer their APS value to another platform, but if it's gone in the in a bank account, so I would assume it's lost it's isa status, though others seem to think differently, good luck with finding someone at Barclays who knows the rules of this!

As above, I think differently, but am happy to be corrected if anyone provides authoritative evidence that supports their interpretation!  To reiterate, it's not actually an ISA transfer as such, in that OP's father's ISA with Barclays was valued at closure and it's that value that contributes to the mother's APS - it's not necessary for the money itself to remain within the ISA wrapper (unlike for actual ISA transfers), and in fact the mother can receive the APS without even inheriting those proceeds.

crikaus

eskbanker said:

crikaus said:

To the OP one can transfer their APS value to another platform, but if it's gone in the in a bank account, so I would assume it's lost it's isa status, though others seem to think differently, good luck with finding someone at Barclays who knows the rules of this!

As above, I think differently, but am happy to be corrected if anyone provides authoritative evidence that supports their interpretation!  To reiterate, it's not actually an ISA transfer as such, in that OP's father's ISA with Barclays was valued at closure and it's that value that contributes to the mother's APS - it's not necessary for the money itself to remain within the ISA wrapper (unlike for actual ISA transfers), and in fact the mother can receive the APS without even inheriting those proceeds.

Thinking about it, you could well be correct, for example, in the will everything could go to someone else and still the partner will benefit from the APS, they could add their own cash unrelated to the original money/shares, as long as long as it no more than the APS value.

Looks like a call to Barclays on Monday!