Savers hit by ISA tax charge

7th January 2019

Thousands of bereaved partners in the UK could be paying unnecessary tax on inherited ISAs, by missing out on a tax break.

Introduced in 2015, the additional permitted subscription means the spouse or civil partner of someone who has died can inherit the deceased's ISA without a tax charge.

However, a freedom of information request by Zurich suggests only 21,000 people took advantage of the rule in the 2017/18 tax year - an estimated 14% of the people entitled to it.

As the average value of an inherited ISA stands at £55,000, this could mean savers are paying £110 a year in tax they did not need to pay.

Alistair Wilson, head of retail platform strategy at Zurich, said:

"Despite being in its fourth year, the take-up of this tax break looks shockingly low.

"People who miss out on the allowance will be hit by a tax bill that quickly eats into the returns on their savings and slows down the growth of their nest egg."

Get in touch to discuss your personal finances.

If you’re interested in working with us and wish to discuss your requirements then please call us on 44 (0) 141 221 2257 or email contact@thomasbarrie.co.uk

Atlantic House
1A Cadogan Street
Glasgow
G2 6QE

 

There is another entrance to the building at 45 Hope Street, G2 6AE.

More details