Income Tax (Trading and Other Income) Act 2005 section 694A

Deceased investors

Section 694A extends the income tax exemption available for individual investment plans (such as ISAs) so that it continues to apply to plan income during the period when a deceased investor's estate is being administered.

• When an ISA holder dies, income from their plan investments can remain exempt from income tax during the administration of their estate, benefiting personal representatives and estate beneficiaries alike.
• Investments qualify as "administration-period investments" if they were held under a tax-exempt plan immediately before the investor's death, including any replacement investments that directly or indirectly represent the original holdings.
• The definitions of "individual" and "investor" are broadened so that personal representatives and anyone authorised to give directions to plan managers can benefit from the exemption during the administration period.
• Regulations may specify the time limits for how long the exemption applies, which can be linked to the completion of the administration of the deceased's estate.