10th October 2020

Prudential Top 5 ISA questions

ISAs were introduced on 6 April 1999, replacing Personal Equity Plans (PEPs) and Tax-Exempt Special Savings Accounts (TESSAs) - remember them? Despite their longevity (21 years) and simple tax-free premise, ISAs queries continue to arise thanks to those niggling quirks within the ISA rules. In no particular order, here are the top five queries we have encountered in recent months.

What happens to ISA tax advantages on death?

Where an investor dies after 5 April 2018, any ISA held will be designated a “continuing account of a deceased investor” and will remain so until the earlier of

• The completion of the administration of the deceased’s estate.
• The closure of the account.
• The third anniversary of the death of the account investor.

No subscriptions, including replacement flexible subscriptions, can be made, however, active management of the investments already held within the account may continue subject to the Ts&Cs. The personal representatives cannot transfer the account to an alternative ISA manager.

Funds held within the account continue to benefit from ISA tax advantages and therefore personal representatives and beneficiaries do not face income tax or capital gains tax liabilities on investments retained in an ISA during the administration of the deceased’s estate.

Read full article here. 

Tax, Trust & ISA