Last week’s Autumn statement provided a few welcome surprises. The headline grabber was definitely the reform of the outdated Stamp Duty system.
However, one point which seems to have gone under the radar, is a change to ISAs which effectively allows partners to inherit a deceased Spouse’s ISA. Deaths on, or after the 3 December, means surviving Spouses will have an additional ISA allowance, equal to the amount the deceased Spouse had in their ISA. This can be used from 6 April 2015 & could help the surviving partner to preserve a tax-efficient income.
The cash or investments are passed on to the Spouse or other Beneficiaries as part of the Estate and still subject to Inheritance Tax (although there is no IHT on inter-Spouse transfers). The ISA status is being retained is by providing an additional one-off allowance to the surviving Spouse to be used on or after 6 April 2015. Couples almost invariably manage their money jointly, using individual tax wrappers such as ISAs to shelter their savings and investments from tax.
The ISA limit will also increase to £15,240 from 6 April 2015.
As with all these changes, we try to proactively suggest that clients consider & seek specialist advice in relation to IHT. This in turn, should be considered more widely within your legal status, i.e. Wills & Lasting Powers of Attorney (LPAs). If you do not have a financial advisor, we would be happy to suggest one who shares our proactive stance.
To arrange a discussion about Inheritance Tax, please get in touch with Paul Clark on 01625 523988 or mail@JBGass.com