Individual savings accounts (Isas) are rightly lauded for their tax efficiency, and with income tax and capital gains tax (CGT) rates rising as the government attempts to plug the UK’s huge deficit, they’re likely to remain the investor’s first-choice tax wrapper. But few people realise that while investments held within Isas are exempt from income and capital gains tax, they are not exempt from inheritance tax.
If you have built up considerable wealth within an Isa – not hard, given that they’ve been around for more than ten years now – then you should be aware that when you die, that money will form part of your estate.
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Tags: ISA, save money, tax