Inheriting an ISA Allowance

polymaff

When you inherit a cash ISA allowance, can you invest in any cash ISA or do cash ISA providers see you as over a barrel and only offer extremely low rates?

McKneff

Not ever heard of an inheritance of an Isa. 
Do you mean like when somone dies.

I am puzzled

FatherTireseus

https://www.which.co.uk/money/savings-and-isas/isas/cash-isas/can-you-inherit-an-isa-av3zk0s5ud6q#headline_1

Yes, ISAs can be inherited, but only by spouses or civil partners.  That is to say, the value of the deceased person's ISAs can be inherited as an allowance by the spouse and retain the tax free advantages, known as an Additional Permitted Subscription (APS).  The article from Which has some useful information.  

But not all ISA providers offer APSs. You can transfer them,  but only if the provider offers this.  And cash ISA rates are pretty low at the moment but I think there's nothing to stop someone moving it to a stocks and shares ISA as long as the platform accept APSs.  In the turbulent financial markets at the time of writing, though, keeping it in cash may be low return but much lower risk 

Albermarle

For most ( not all) people cash ISA's are redundant . A basic rate taxpayer can earn up to £1000 in interest pa tax free anyway .
Non ISA savings accounts usually pay better rates than ISA's .

Keep_pedalling

There is no such thing as and inherited cash ISA allowance. A spouse / civil partner gains an additional allowance equal to the value of the deceases spouse / partner, but regardless of what kind of ISA that was they can use the additional allowance for any ISA type, but sticking it in a cash ISA would be rather pointless as they poor value and tax savings they offer are more than cancelled out by the poor interest offered for the vast majority of savers.

polymaff

FatherTireseus said:

https://www.which.co.uk/money/savings-and-isas/isas/cash-isas/can-you-inherit-an-isa-av3zk0s5ud6q#headline_1

Yes, ISAs can be inherited, but only by spouses or civil partners.  That is to say, the value of the deceased person's ISAs can be inherited as an allowance by the spouse and retain the tax free advantages, known as an Additional Permitted Subscription (APS).  The article from Which has some useful information.  

But not all ISA providers offer APSs. You can transfer them,  but only if the provider offers this.  And cash ISA rates are pretty low at the moment but I think there's nothing to stop someone moving it to a stocks and shares ISA as long as the platform accept APSs.  In the turbulent financial markets at the time of writing, though, keeping it in cash may be low return but much lower risk 

Thank you so much.  That article addresses all of my questions.  I'll try to generate an up-to-date version of that article's data - based upon searches using terms I've never heard of - like APS. Many thanks.

eskbanker

https://www.gov.uk/guidance/manage-additional-permitted-subscriptions-into-an-isa is also a reasonable reference document....

polymaff

An excellent description from the other side of the desk's point of view.  Thank you, Eskbanker.