If the deceased customer passed away before the 6th April 2018, any ISA held in the name of the deceased will cease to be an ISA Account and will be subject, from the date of death, to the tax legislation at that time.
If the deceased customer passed away on or after the 6th April 2018, their ISA account will become a “Continuing Account of a Deceased Investor” (a Continuing ISA). This means that interest earned on the account from the date of death will be exempt from tax. The account will remain as a Continuing ISA until the earlier of the following-
- The completion of the administration of the deceased’s estate
- The Closure of the account
- The 3rd anniversary of the death of the investor
If the account has not been closed or the administration of the estate has not been completed by the 3rd anniversary of the date of death, we will close down your account and will transfer the balance and any interest earned during the 3 years to the Select deposit product or nearest equivalent deposit product, if the Select deposit product is no longer available. Any interest earned after that date will become taxable in the hands of the estate. 8 The money in the account will be released in the same way as other sole accounts. The surviving spouse is entitled to an additional permitted subscription allowance, in addition to their own annual allowance
If the date of death is before the 6th April 2018, this is limited to the value of the deceased investor’s ISA at their date of death and must be used within 3 years.
If the date of death is on or after the 6th April 2018, the surviving spouse may choose either the value of the account balance at the date of death OR the value of the account balance when the account is closed or when it stops being a Continuing ISA – whichever value is higher. This might occur where funds have been paid out of the ISA for expenses, the additional permitted subscription value can be used as of the date of death which might be higher than when the account stopped being a Continuing ISA.
If you wish to avail of this allowance, you will need to complete an Additional Permitted Subscription declaration which is available from your nearest branch.