Bereavement and planning ahead
Here you’ll find all the information you need in relation to administering an account following the death of a client. In addition, we cover registering an Expression of Wish for a client’s pension, the rules and procedures relating to inherited ISAs and how to register a Power of Attorney with us (Court of Protection is covered too).
Investing in an inherited ISA
The first thing to note is that there is a time limit for using the allowance. This is three years from the date of death or 180 days after administration of the estate completes, whichever is later:
- It is available irrespective of whether the recipient is a beneficiary in the deceased's will
- Since 6 April 2018, the tax benefits of an ISA continue after the death of the holder until the earlier of:
- Completion of the administration of the deceased's estate
- Closure of the account
- Third anniversary of the death of the account holder
- Tax treatment depends on individual circumstances and all tax rules may change in the future.
Investing your client’s own money
- Complete an Inherited ISA Allowance form and send it to us at Fidelity, PO Box 391, Tadworth, KT20 9FU.
- The allowance can be invested from the date of death. Cheque payments can be made as often as the client wishes, as long as they remain within the available allowance or expiry date of the allowance.
Please note a grant of probate is not required for this investment.
Using inherited ISA money
- Complete an Inherited ISA Allowance form and send it to us at Fidelity, PO Box 391, Tadworth, KT20 9FU.
- For clients that passed away between 3 December 2014 and 5 April 2018, the amount available is equal to the value of the ISA holdings at the date of death, even if the value once sold is greater.
- For clients that have passed away since 6 April 2018, the amount available can be either equal to the value of the ISA holdings at the date of death or the value of the ISA once sold; whichever is greater.
Please note this option is available only after probate has been granted.
Using the allowance by selling the beneficiary’s Investment Account
- Complete this form and send it to us at Fidelity, PO Box 391, Tadworth, KT20 9FU.
- The money will be out of the market for between five and seven days. Occasionally it may take a little longer than expected.
Please note this option is available only after probate has been granted.
Transferring an allowance from another provider
- Complete this form and send it to us at Fidelity, PO Box 391, Tadworth, KT20 9FU.
- We will confirm the transfer of the allowance to us, and the total ISA investments at the date of death.
- The transferred Inherited ISA allowance will now be available to your client for investment. It may take up to 30 days to receive confirmation of the allowance from the original ISA manager
Guide
Frequently asked questions
You will receive a notification from us confirming we have received your client’s transfer application. We will then forward the form to the provider currently managing the deceased’s ISA investments, and contact you when we receive confirmation of the value of the inherited ISA allowance.
We would expect to receive the transfer within 30 days of receiving the request. Where the request is to transfer an ISA allowance away from us, we would again expect this action to be carried out within 30 days.
The surviving spouse/civil partner can transfer the inherited ISA allowance from all providers. Where separate ISAs were held, we require separate transfer forms to be completed for each provider.
The ISA inheritance transfer is purely the movement of the ISA allowance. No money will change hands between providers as part of this process, although money can be invested thereafter. The other provider will follow its own procedures upon the death of the ISA holder and may encash the existing ISA assets depending on the executor’s instructions.
The original provider will need to confirm to us the inherited ISA allowance the client is now entitled to. Once our systems have been set up to show the inherited ISA allowance, the client can invest funds to utilise the additional allowance using the relevant form above.
No, it’s only possible to transfer the additional allowance once. When you have chosen a provider to make the additional contributions to, then all contributions in respect of that additional allowance must be made to the chosen provider.
It is possible to transfer out the ISA assets subsequently, but the transfer would not take any ‘unused’ additional allowance with it. Any additional allowance not used in the three-year period is lost.
In this case, it is possible for us to transfer the ISA allowances from the deceased individual to the surviving spouse/civil partner. The existing ISA assets can be sold and reinvested into the survivor's ISA without the need for the proceeds to be paid out first.
You should use the Inherited ISA Allowance form. The client will be out of the market during the sell and reinvestment process.