Savers were delighted earlier this year, when George Osborne announced a big increase to the amount which can be paid in to an ISA each year, as well as more flexibility for Cash ISA savers.
Well, today’s Autumn Statement bought another pleasant surprise for ISA savers and investors.
Read on as we reveal all.
ISA wrapper continues on death
Currently, if you die and leave your ISA to your spouse, the tax benefits of the ISA are lost; meaning that future growth and income could be taxed.
To put it another way, when you die so does the tax-efficiency of your ISA.
However, in a surprise move, the Chancellor announced today that ISAs left to your spouse when you die will now keep their tax-efficient ISA status, allowing tax-efficient growth and income.
The new rules will start from today, 3rd December.
Some press reports have hailed this change as a scrapping of the ‘ISA death tax’, which isn’t the case. Inheritance Tax is never paid when assets are transferred between spouses and despite today’s announcement, Inheritance Tax could still be payable on the ISA when the second spouse dies.
The Chancellor also announced that the maximum annual ISA contribution will rise on 6th April 2015 from £15,000 to £15,240.
We’re here to help
If you would like to know more about how the ISA changes affect you get in touch, we’re here to help.
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