Fixed isa with two years left to run treatment after death

poppystar

I’m dealing with an estate with a fixed isa on a very good rate. Looking at the government site it suggests that isas can or should remain open after death until estate settled or isa requested to be closed or three years pass. The bank however has closed it and say that is their policy. I raised a complaint but that got nowhere. Do individual financial institutions rules overwrite the general isa rules? Or is the information on gov.uk just a guidance that they don’t have to adhere to?

colsten

I think the bank are acting in line with the Guidance for ISA Managers. Have you checked their T&Cs?

poppystar

Interest on cash on deposit for accounts where the account investor dies on or after 6 April 2018

When an ISA investor dies on or after 6 April 2018, the ISA can continue to benefit from the ISA tax advantages during the administration period of the investor’s estate. The ISA is designated as a ‘continuing account of a deceased investor’ (see when an investor dies on or after 6 April 2018).

@colsten Sorry couldn’t paste the link but this came up as part of the link you included. So am still confused as my reading of this is that the isa manager can leave it as it is during administration? 

xylophone

https://www.gov.uk/individual-savings-accounts/if-you-die

Your ISA will end when either:

• your executor closes it
• the administration of your estate is completed

Otherwise, your ISA provider will close your ISA 3 years and 1 day after you die.

There will be no Income Tax or Capital Gains Tax to pay up to that date, but ISA investments will form part of your estate for Inheritance Tax purposes.

But do you have the terms and conditions from when the account was opened?  What does it say about the death of a saver?

colsten

It says they can, not they have to. This means it's down to the ISA Manager, and you need to check their T&Cs.

poppystar

Ok, will have another go at finding the T&Cs. As the particular Isa is not available now I didn’t find them on first pass so will delve a bit deeper. 

It’s because the first person I spoke to in the bereavement department told me I could leave it open and then it was closed almost immediately, that has left me doubting. I didn’t even realise it could be an option (which ok, it may not be!) until it was offered.

thanks