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ISA income in administration period

Continued tax advantaged status (s27 FA2016)

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Hi all. Has anyone heard anything further since the above legislation? FA2016 gave the Treasury powers to regulate for ISAs to maintain their tax-advantaged status following the death of the account holder, but was going to apply after "further consultation and amendment to the ISA regulations".

I have two clients who have relatives who died in August 2016 and March 2017 respectively, both holding ISAs at the date of death, so this could potentially impact the taxable income in the administration periods following the deaths. However, I am struggling to find any further updates.

Any help/pointers in the right direction would be much appreciated.

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By catlady
21st Jul 2017 18:30

I am a REALLY rusty on this, but I think that the tax wrapper still ceases upon death, and subsequent interest is taxable.

The spouse inherits the right to extra ISA allowance to the value of the deceased's ISA but it is not a continuation of the same ISA.

This may help, 6A:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil...

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By gainsborough
21st Jul 2017 19:27

Thanks catlady!

I've since found the draft legislation, so think it's just a case of waiting and seeing when the changes come into effect. I've attached the link here in case it's of use to anyone else:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil...

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By torry400
23rd Aug 2017 17:22

Although this was included in the draft regulations, it appears that it didn't make it through to either of the final amendment regulations:

http://www.legislation.gov.uk/uksi/2017/186/introduction/made
http://www.legislation.gov.uk/uksi/2017/466/contents/made

Perhaps there will be further amendments, but it seems that, for the moment at least, the idea has been scrapped. Unless anyone knows any different....

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