New ISA transfer rules and taxation

New ISA transfer rules and taxation

Didn't find your answer?

Good morning

For the new ISA transfer rules whereby if a spouse/civil partner dies, thier ISA can be transferred to their spouse/civil partner, does anyone know if there would be any taxation implications if the funds are taken out of the tax wrapper before it gets transferred (some providers are saying that they wlll need to first remove the funds from the ISA tax wrapper)?

Under the new ISA transfer rules, I have found statements such as "the spouse will inherit the tax advantages" and that is the only confirmation that any interest from the transferred ISA will not be taxable during the administration period.

Before April 2015, I know that an ISA was, on death, taken out of the ISA wrapper and therefore the interest was at that point taxable.

Apparently now, that will not happen but I cannot find any clarification as to what happens during the time between the transfer if the funds are not protected by the ISA wrapper.

I dont want to assume as we have a client who has inherited an ISA worth 1/4 million, the tax implications could be fairly substantial.

Thank you

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.