Thousands of bereaved partners in the UK could be paying unnecessary tax on inherited ISAs, by missing out on a tax break.

Introduced in 2015, the additional permitted subscription means the spouse or civil partner of someone who has died can inherit the deceased's ISA without a tax charge.

However, a freedom of information request by Zurich suggests only 21,000 people took advantage of the rule in the 2017/18 tax year - an estimated 14% of the people entitled to it.

As the average value of an inherited ISA stands at £55,000, this could mean savers are paying £110 a year in tax they did not need to pay.

Alistair Wilson, head of retail platform strategy at Zurich, said:

"Despite being in its fourth year, the take-up of this tax break looks shockingly low.

"People who miss out on the allowance will be hit by a tax bill that quickly eats into the returns on their savings and slows down the growth of their nest egg."

Get in touch to discuss your personal finances.

Williams Financial Planning Limited logo

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.

 

By submitting your details you agree to receive email marketing from Williams Financial Planning and have read and understood our Privacy Notice. You can withdraw your consent or change your preferences at any time by emailing us or by clicking the link at the bottom of every email we send you.

You have Successfully Subscribed!