NS&I Direct ISA - Inherited Allowance
Discussion
Can I just check something with the financial gurus here?
My late father had an ISA with NS&I - as executor I started the process of tidying all his finances up when we got probate in late ‘23. ISAs can be transferred to spouses without losing the tax-free status I was told, all good, so I started the process. It has taken an absolute age (over a year to sort out) due to a combination of life getting in the way, tracking down documents such as a 50 year old marriage certificate, and of course general incompetence by NS&I.
The money was finally transferred to my mother a couple of months ago, and a new Inherited Allowance ISA opened in her name, however the maximum allowance amount was less than what she had received. I called before the new year and they said it was a mistake and they would increase the allowance.
As this was still not showing today I called them again. Turns out whoever I spoke to was telling porkies! The explanation I got today was that an interest payment was received at the end of the tax year (‘23-‘24 I guess) but the inherited allowance was for the amount when the process was started.
My argument is that it doesn’t matter whose name the ISA is in - my dad or my mum - the interest ought to be added in the same. I mean, it’s not a big deal as it’s only a few hundred quid, but it’s a few hundred quid that should be in that tax free account!
Were they right in what they told me? I have had so much misinformation and the process has been so unclear I have nearly lost the will to live a few times over the last year or so, so I would not be totally surprised if it were the latest round of utter b
ks…
My late father had an ISA with NS&I - as executor I started the process of tidying all his finances up when we got probate in late ‘23. ISAs can be transferred to spouses without losing the tax-free status I was told, all good, so I started the process. It has taken an absolute age (over a year to sort out) due to a combination of life getting in the way, tracking down documents such as a 50 year old marriage certificate, and of course general incompetence by NS&I.
The money was finally transferred to my mother a couple of months ago, and a new Inherited Allowance ISA opened in her name, however the maximum allowance amount was less than what she had received. I called before the new year and they said it was a mistake and they would increase the allowance.
As this was still not showing today I called them again. Turns out whoever I spoke to was telling porkies! The explanation I got today was that an interest payment was received at the end of the tax year (‘23-‘24 I guess) but the inherited allowance was for the amount when the process was started.
My argument is that it doesn’t matter whose name the ISA is in - my dad or my mum - the interest ought to be added in the same. I mean, it’s not a big deal as it’s only a few hundred quid, but it’s a few hundred quid that should be in that tax free account!
Were they right in what they told me? I have had so much misinformation and the process has been so unclear I have nearly lost the will to live a few times over the last year or so, so I would not be totally surprised if it were the latest round of utter b
ks…Edited by NiceCupOfTea on Monday 13th January 16:05
Despite their placating words nothing NS&I do or rather don’t do surprises me.
I can vaguely understand why any interest may have been temporarily frozen per se but afaik any inherited allowance would normally include the total available which would presumably include any interest due post probate once added to the existing capital.
Have they said what they plan on doing with the interest ?
I can vaguely understand why any interest may have been temporarily frozen per se but afaik any inherited allowance would normally include the total available which would presumably include any interest due post probate once added to the existing capital.
Have they said what they plan on doing with the interest ?
alscar said:
Despite their placating words nothing NS&I do or rather don’t do surprises me.
I can vaguely understand why any interest may have been temporarily frozen per se but afaik any inherited allowance would normally include the total available which would presumably include any interest due post probate once added to the existing capital.
Have they said what they plan on doing with the interest ?
They have paid out the full amount, but they have placed a lower maximum amount on the Inherited Allowance ISA they have created, so I can’t pay it all in.I can vaguely understand why any interest may have been temporarily frozen per se but afaik any inherited allowance would normally include the total available which would presumably include any interest due post probate once added to the existing capital.
Have they said what they plan on doing with the interest ?
I just don’t trust that this is the full story as I have been told so much rubbish by them, and it doesn’t make any sense to me. Tax free is tax free no matter whose name it’s in.
The Gov.uk page - https://www.gov.uk/individual-savings-accounts/inh... - says:
"Inheriting an ISA from your spouse or civil partner
If your spouse or civil partner dies you can inherit their ISA allowance.
As well as your normal ISA allowance you can add a tax-free amount up to either:
the value they held in their ISA when they died
the value of their ISA when it’s closed"
Sounds like NS&I are working off the first clause, but I wonder why there's both clauses - surely only the second one is needed?
"Inheriting an ISA from your spouse or civil partner
If your spouse or civil partner dies you can inherit their ISA allowance.
As well as your normal ISA allowance you can add a tax-free amount up to either:
the value they held in their ISA when they died
the value of their ISA when it’s closed"
Sounds like NS&I are working off the first clause, but I wonder why there's both clauses - surely only the second one is needed?
was8v said:
You inherit the value of the ISA at the time of death
Any interested earned in the interim between death and sorting it all out will fall outside of the ISA allowance inherited
You can keep a partners ISA open for three years following their death…see Nationwide for a very clear explanation of the options.Any interested earned in the interim between death and sorting it all out will fall outside of the ISA allowance inherited
Check out this Barclays reference.
APS 1
APS 2
Also keep in mind that it is the allowance that can be inherited.
It is quite possible that the contents of the deceased’s ISA are left to a child, but the surviving spouse is still able to claim the APS (1 or 2) and they can then fill that up with assets sourced from anywhere…
https://www.barclays.co.uk/content/dam/documents/s...
APS 1
APS 2
Also keep in mind that it is the allowance that can be inherited.
It is quite possible that the contents of the deceased’s ISA are left to a child, but the surviving spouse is still able to claim the APS (1 or 2) and they can then fill that up with assets sourced from anywhere…
https://www.barclays.co.uk/content/dam/documents/s...
Mogul said:
Check out this Barclays reference.
APS 1
APS 2
Also keep in mind that it is the allowance that can be inherited.
It is quite possible that the contents of the deceased’s ISA are left to a child, but the surviving spouse is still able to claim the APS (1 or 2) and they can then fill that up with assets sourced from anywhere…
https://www.barclays.co.uk/content/dam/documents/s...
Thanks for this - how can I tell whether I am under APS 1 or APS 2? If 1, or the first part of 2 (date of death or when the estate settled) then I guess I don’t have a leg to stand on (although they have been so slow and obtuse and so I would be happy to argue the toss), but if it goes by the 3rd anniversary of death then we are within that.APS 1
APS 2
Also keep in mind that it is the allowance that can be inherited.
It is quite possible that the contents of the deceased’s ISA are left to a child, but the surviving spouse is still able to claim the APS (1 or 2) and they can then fill that up with assets sourced from anywhere…
https://www.barclays.co.uk/content/dam/documents/s...
If only any of this had been made clear to me at the time. It’s all been complicated by me needing to sort power of attorney, finding a marriage certificate, getting signatures from somebody a 6 hour round trip away who can’t write due to MS, etc.
BTW, the latest thing which means I have to endure their awful automatic call triageing system (“I’m sorry to hear of your loss”) and sub-D grade GCSE music Mozart pastiche composition call waiting system is that, after transferring the allowed amount to the ISA yesterday I have received an email simply saying they “couldn’t accept the bank transfer”. No apology, no reason, no “what to do next”. This is a typical example of their obfuscated and unhelpful approach at every stage of the process. So I’ll have to waste yet another half an hour on the phone to them tomorrow finding out what the hell has happened now.
I remember reading on here somebody saying their elderly relative was reduced to tears trying to deal with a deceased relative’s NS&I savings again and I can well believe it. They are an absolute shower of st to deal with, and every time I think “well this must be the last hurdle now” then some other bullst rears its head…
I remember reading on here somebody saying their elderly relative was reduced to tears trying to deal with a deceased relative’s NS&I savings again and I can well believe it. They are an absolute shower of s
t to deal with, and every time I think “well this must be the last hurdle now” then some other bullst rears its head…I think you may need to put a drop of brandy in and live up to your user name !
Rather than waste your time phoning I think making a formal complaint to them is now overdue.
I say this as that’s what I did and when they didn’t think they had done anything wrong ( they had ) then complained to the financial ombudsman.
This did see then some progress but it certainly helped me in cathartic terms along the way.
I hope you manage to get somewhere soon.
Rather than waste your time phoning I think making a formal complaint to them is now overdue.
I say this as that’s what I did and when they didn’t think they had done anything wrong ( they had ) then complained to the financial ombudsman.
This did see then some progress but it certainly helped me in cathartic terms along the way.
I hope you manage to get somewhere soon.
Bobtherallyfan said:
was8v said:
You inherit the value of the ISA at the time of death
Any interested earned in the interim between death and sorting it all out will fall outside of the ISA allowance inherited
You can keep a partners ISA open for three years following their death…see Nationwide for a very clear explanation of the options.Any interested earned in the interim between death and sorting it all out will fall outside of the ISA allowance inherited
OK, I guess when we were granted probate that was that as far as the ISA was concerned. Although it has taken so long to jump through the hoops NS&I definitely play a part in being culpable for it taking so long.
Today’s update to the saga is that when I called to find why paying in the money to the ISA hasn’t worked, they can’t tell me as I have been dealing with my dad’s estate due to being executor. Now this is related to my mum they can’t talk to me about it as I don’t have PoA (well I do, but it’s not registered with them as I haven’t needed it). SO that will be another couple of weeks (and probably more issues as it is an old enduring power of attorney), and all this to find out why the money hasn’t gone through, which I can’t help feeling will be due to another more complicated issue.
Today’s update to the saga is that when I called to find why paying in the money to the ISA hasn’t worked, they can’t tell me as I have been dealing with my dad’s estate due to being executor. Now this is related to my mum they can’t talk to me about it as I don’t have PoA (well I do, but it’s not registered with them as I haven’t needed it). SO that will be another couple of weeks (and probably more issues as it is an old enduring power of attorney), and all this to find out why the money hasn’t gone through, which I can’t help feeling will be due to another more complicated issue.
Gassing Station | Finance | Top of Page | What's New | My Stuff