Latimer Hinks Solicitors, a leading North East law firm, has welcomed the Government’s decision to reform income and capital gains tax on ISAs during the administration of a deceased estate.
The Darlington-based firm, which specialises in wills and inheritance tax, believes that the previous system of removing the ‘tax free wrapper’ from ISAs when the account holder died caused unnecessary complications for smaller estates and are pleased at the potential tax saving for bereaved families.
Originally, any income received into the account or gains made by associated stocks and shares during the administration period would be subject to either Income Tax or Capital Gains Tax as appropriate.
The new regulations mean that the accounts will now retain their tax free status throughout the administration period or for three years after death, whichever is shorter.
Gillian Ibbotson, Trust & Estate Practitioner at Latimer Hinks, said: “This is really positive news for beneficiaries, taking unnecessary stress away and opening up some excellent planning opportunities.
“Many of these accounts are small and, given that interest rates have been very low for years, the effort associated with the necessary tax compliance is disproportionate. The new regime is also positive for those with large stocks and shares ISA portfolios, whose Executors will be able to take a more pragmatic view of the market, disposing of stocks and shares without incurring Capital Gains Tax.”
Latimer Hinks Solicitors has a 14-strong private client department with nine full members of STEP, the Society of Trust and Estate Practitioners specialising in wills, probate, the administration of trusts and estates, succession and tax planning.
For more information on inheritance tax planning, visit: http://www.latimerhinks.co.uk/