The right to inherit an ISA from a spouse or civil partner who has died is a relatively recent right, but the process is very complex. The proposal to simplify matters is very welcome and is likely to result in a greater take up.
The Government said it will look to simplify the process for bereaved spouses who inheirt their partner's Isa. At the moment, the surviving spouse can claim a one-off extension to their own Isa allowance equal to the value of their late partner’s savings. The savings do not remain in their original Isa wrapper and the surviving spouse has three years to deposit the equivalent amount back into an Isa. But the process is complex and many savers don't understand how it works. The Government has confirmed that it will legislate to allow the Isa savings of a deceased person to remain within the Isa wrapper, and continue to benefit from tax advantages, during the administration of their estate.