ISA of deceased

CrabLobster

Is it permissible to leave an ISA in the name of the deceased for the maximum period allowed of 3 years even if Probate is granted 1 year after death? (APS doesn’t apply) The sole beneficiary of the estate and ISA is happy to leave the ISA untouched to retain the benefit of any income / capital gain being free of tax.

TheMilkmansDad

well yes you can. But why would you not just transfer to the beneficiary? you can maintain the ISA status and it not effect their annual allowances.

SadCodeMan

I think you can only transfer the ISA allowance to a benficiary if they are a spouse.

oldernonethewiser

Explained here

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

Keep_pedalling

You can do but if I were the executor and not the beneficiary of the ISA I would just want the estate distributed so I could get the whole thing out of the way ASAP.

That rate of interest they would be getting is also likely to quite a bit lower than they could get elsewhere, even without the tax free status, and if it is a S&Ss ISA you risk a ending up with a lot less in the short term.

poseidon1

CrabLobster said:

Is it permissible to leave an ISA in the name of the deceased for the maximum period allowed of 3 years even if Probate is granted 1 year after death? (APS doesn’t apply) The sole beneficiary of the estate and ISA is happy to leave the ISA untouched to retain the benefit of any income / capital gain being free of tax.

Yes you can, no question. 

Whether you should depends on how large an ISA, and rates of return.

I would hope my executors would have the good sense to  retain my mid six figure stocks and shares ISA generating an average income return of 6% for as long as they are legally permitted. More tax free income and potential capital growth for the end beneficiaries, to compensate for substantial tax losses on my SIPP.