My client's aunt died in March 2020 and she left him her estate, which includes a stockbroker's ISA.
The value has increased significantly and he is aware that the executors can sell the shares in the ISA during administration (up to 3 years) and the gain will be tax free.
His question is if he just gets the executors to transfer the shares into his own name whether his base cost is probate value or the value on the date of transfer. I am fairly sure it is probate value but I cannot find a definitive answer to this and should be grateful to hear the views of others.
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Just to be clear, "the ISA dies with the owner" is true ... albeit subject to the 3 points you've listed.
What this means is that AFAIK the ISA cannot be transferred to your client ... so the 'tax-free status' is lost at one of the 3 points in time BEFORE your client gets the value (whether as unwrapped shares or cash or whatever, but not as an ISA).
Qualification periods and deadlines abound in tax. For example it is no more an anomaly that the taxpayer who sells his shares in his personal company a day before or a day after he has held them for two years. If the first case no BADR in the second BADR.
Yeah, sorry to have gone off on a tangent (I was just a tad concerned that the 'status' concept was being lost in the conversation about the ISA dying with its owner).
Anyway it's nice to have an example where the answer to your original question is both clear and logical - transfer value being what I would've expected!