Individual Savings Accounts (ISAs)

What happens if I die?

Your ISA will end on the date of your death. There will be no tax to pay on income or capital gains up to that date, but your personal representatives will have to account for tax on any income or gains arising after your death. The ISA manager will either

  • sell the investments and pay the proceeds to your personal representatives (or a beneficiary of your estate), or
  • transfer the investments directly into their hands.

The terms and conditions of the ISA may specify which it will be.

An ISA life insurance policy will pay out on your death. Your personal representatives will have to claim the death benefit. There will be no tax to pay on income or capital gains that arise before the insurer accepts the claim. However, your personal representatives will be taxed on any interest that is paid if there is then a delay in paying out the claim. The insurer will deduct tax at the lower rate before paying over the interest.

ISA investments form part of your estate for Inheritance Tax purposes.

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