Surviving spouses can now inherit their deceased partners ISA without losing its tax-free status and without it affecting their own ISA allowance limit.
The Skipton Legacy ISA, which pays 1.50% interest, allows customers to transfer their Additional Permitted Subscription following the death of their spouse of civil partner to the Society – it is not for current year ISAs or ISA transfers in.
The APS allowance is calculated by adding together a loved one’s ISA contributions from previous tax years and the current tax year, along with interest to the date they died. It sits alongside a person’s own annual ISA allowance and they have three years to use it, or 180 days after the administration of the estate is complete, if this is later.
ISA rules don’t allow someone’s spouse’s ISA itself to be transferred directly to them, but if the ISA funds are left to them they can reinvest them in an ISA using their APS allowance.
Kris Brewster, Skipton’s Head of Products, said:
“New rules mean that if someone’s husband, wife or civil partner died on or after 3 December 2014 and had savings in ISAs, people can still benefit from whatever they’d built up in tax-free entitlements, whether or not they inherited the actual funds themselves.
“The Legacy ISA helps customers track their payments in, making it easier to manage and ensure they maximise their entitlement.”
