S&S ISAs after death of holder

[omniflow]

My Mum died recently and she had a couple of years worth of S&S ISAs with Aviva. Up until recently they had been doing very well, but I've got no idea how they've faired in the last couple of months. However, they were on a 7/10 risk profile so I wouldn't be surprised if they've tanked.

I've googled this, and from what I've read I've concluded that the ISAs can continue "as is" for up to 3 years after my Mum died. Meaning that, once probate has been obtained, I can monitor the value and convert to cash when the value is favourable.

Do I have this right, or is there some wrinkle that I have overlooked?

[Mr Pointy]

I'd check the actual value because they may not have dropped as much as you think - I'm down 2.2% over the last two months. It might be better to cash in now depending on how you think the world markets are going to go over the next three years: I'd say there's more scope for going down rather than up.

[omniflow]

Mr Pointy said:

I'd check the actual value because they may not have dropped as much as you think - I'm down 2.2% over the last two months. It might be better to cash in now depending on how you think the world markets are going to go over the next three years: I'd say there's more scope for going down rather than up.

I don't have probate (yet)......

[Magic919]

Says here it ceases when the estate admin completes https://www.gov.uk/individual-savings-accounts/if-...

[Tommo87]

With an ISA I think the tax benefits end as at date of death.

Which will be recorded as soon as you provide a death certificate.

[The Leaper]

The executor(s) will need a value of the ISA as at the date of death for IHT and probate purposes.

If, as it very likely, the ISA is not recorded in any specific way in the Will, the executor(s) will need, after obtaining probate, to cash it in for its then cash value, in order to distribute the value and other assets as per the deceased's Will.

R.

[alscar]

Normally the ISA can be kept in place for a max of 3 years and 1 day with full retention of any tax benefits.
Upon closure the “ only “ tax that may then be due is in respect of IHT.

[omniflow]

IHT, CGT and Income tax are not of any concern.

My sole concern relates to the valuation of the S&S ISA at the time of redemption.

If there is leeway as to when that happens then I'm happy. With 3 years leeway then I'm extremely happy.
If there's no leeway then I'm unhappy but accepting of the hand I've been dealt.

[Panamax]

The Leaper said:

The executor(s) will need a value of the ISA as at the date of death for IHT and probate purposes.

OP - you already have the answer, above.

IHT is payable on the value of the ISA at date of death. The ISA can then be run on by the Executors for up to three years as described above without income tax or CGT. There's no more IHT because that was all done as of date of death. Whether you want to delay the winding up of an estate to faff about with an ISA is another question altogether.

[ChrisH72]

By the time you get probate the value might have bounced back a bit. My Aviva pension has dropped 5% since 1st of March. It seems like there is a market correction going on and there's no telling where it goes from here.

Would delaying cashing the ISA in cause problems with the estate administration and paying beneficiaries?

If it were me, I'd just start the process of getting monies in once you get probate as it can take time. My dad had 50k premium bonds and I am still waiting for NS&I to pay them back almost a month after sending in all the paperwork. Standard life took over 2 months to pay back his small private pension.

[GliderRider]

Its worth checking if any of the shareholdings are in AIM shares. Some will be exempt from inheritance tax if the company had met qualifying criteria for two years at the time of the holders death. It is pretty difficult to find out which are though. I wrote to each company, (the PLC, not the ISA company) when sorting out my father's estate. Some were helpful, some didn't know, and some didn't reply.

[Minglar]

omniflow, condolences on your loss. It’s not clear from your original post but I am assuming your mother’s estate is passing down? If that’s not the case and everything has been left to her spouse, it may be worth reading up about ISA ASP as that may affect your decision on how to proceed. If the situation is the former, ie down, the advice you’ve been given by the usual reliable posters on here is spot on. A valuation from the ISA provider as of the date of death will be required for the Probate application, in order for you to estimate the total value of the estate, irrespective of whether IHT is payable or not. Good luck and HTH a bit. BRM.