Renewal of Index-linked Savings Certificates and death of holder query.

SoozyJ22

I spoke to a very helpful gentleman at NS&I yesterday who confirmed that ILSCs can be used to pay IHT using the DPS. Any not used for IHT can be cashed out (no need to wait for maturity), or transferred into the names of beneficiaries. Where they are transferred they would run until the original maturity date. 

JamesRobinson48

SoozyJ22 said:

I spoke to a very helpful gentleman at NS&I yesterday who confirmed that ILSCs can be used to pay IHT using the DPS. Any not used for IHT can be cashed out (no need to wait for maturity), or transferred into the names of beneficiaries. Where they are transferred they would run until the original maturity date. 

This is great information, thanks very much!

TrickyDicky12

SoozyJ22 said:

I spoke to a very helpful gentleman at NS&I yesterday who confirmed that ILSCs can be used to pay IHT using the DPS. Any not used for IHT can be cashed out (no need to wait for maturity), or transferred into the names of beneficiaries. Where they are transferred they would run until the original maturity date. 

Sorry to be a bit late to this conversation, but are you saying that unmatured ILSCs can be inherited by a non-spouse beneficiary as tax free savings?
I wasn't aware of that!
I was planning to use DPS to pay IHT from Dad's NS&I ILSCs, but if they continue to be tax free on inheritance then I might have to rethink some things...

x44

Correct

Subject any overiding conditions within the will such a stipulating everything must be sold...

Yes:

You can ask NSI to transfer unmatured savings certificates both index linked and fixed rate direct to a beneficary and they they run until they mature at their normal maturity date.

I've done this as executor and beneficiary (around year 2018 and I was a distant relative) and they were simply added to my existing NSI holdings of savings certificates.  

I'm sure its a bit more complex where the beneficiary does not already hold NSI's so does not have a NSI number.  

As I recall the form used by the executor had sections on it which asked what to do with the proceeeds and one option was to transfer.

RobertinCambridge

I do not think this is a way of avoiding inheritance tax. 

You can use the DPS in order to pay the IHT using the ILSC before getting probate. You can, we now learn, have the ILSC paid to a beneficiary without cashing them. That is very valuable, but I do not think it removes the value grom the IHT calculation.

Robert

Notepad_Phil

RobertinCambridge said:

I do not think this is a way of avoiding inheritance tax. 

You can use the DPS in order to pay the IHT using the ILSC before getting probate. You can, we now learn, have the ILSC paid to a beneficiary without cashing them. That is very valuable, but I do not think it removes the value grom the IHT calculation.

Robert

I think when they talked about 'tax free on inheritance' they were referring to the fact that the income from them would continue to be tax free not that it would mean that the IHT would be reduced.

RobertinCambridge

That makes sense.

Those ILSCs are not available any more,  but NS&I let you go on renewing them as they mature. Do it's good to preserve that.