My late husband’s £110,000 Isa left me facing unfair tax bill

MY HUSBAND was a successful investor using the trading platform Interactive Investor. He died in September 2016, after putting his affairs in order.

In February 2017, Interactive Investor was instructed to transfer my late husband’s shares Isa to mine.

I received a letter dated January 19, 2017, advising me that stock and cash had been transferred to my Isa account. This was patently incorrect, as my solicitor didn’t write to them until February 27.

In fact, at some point, the firm had dumped my late husband’s Isa money into my taxable trading account.

At the time of my husband’s death, it had a value of £110,484.

By May 2018, the money still had not been transferred and the value was now £142,449.

I fear that the investment is now exposed to tax and that trades I have made will incur capital gains tax.

Interactive Investor offered me a £500 goodwill payment, which was endorsed by the Financial Ombudsman Service.

P. W., West Sussex.

I am certain this mess was the last thing you wanted to be dealing with while grieving for your husband.

You have sent me an excellent potted history of your attempts to resolve this issue. Let’s first look at the background.

Rule changes from December 3, 2014, mean that when someone dies, their Isa can be transferred to their spouse or civil partner (as long as they’re not separated or estranged), keeping the tax benefits intact.

This is known as an additional permitted subscription (aPS).

The rules initially allowed only the value of the Isa on the date of death to be transferred.

But if someone died on or after april 6, 2018, the Isa can continue until the administration of the estate is finalised, or the third anniversary of the date of death.

Because your husband died in 2016, his Isa fell under the old rules, so it was imperative that the transfer was made as soon as possible to protect the money from tax.

Yet, in your case, the process was delayed by error after error. after I made contact with Interactive Investor, chief customer service and operations officer Gary Shaw took personal oversight of your case and explained everything to you in a letter, as well as offering apologies.

He also assigned a personal case officer to address your concerns.

mr Shaw says: ‘We repeatedly gave incorrect and conflicting information and the service was poor. Based on this review, I am hugely disappointed in the service we offered, and I am sorry for the distress we caused.’

among the errors uncovered in this new investigation are that you still have an additional allowance of £32,151 because not all of the Isa has been moved.

Interactive Investor will support you in sorting this out with your new trading platform.

after looking at assets you have sold, it seems that you do, indeed, have a potential capital gains tax liability of £210 in the 2018/19 tax year, which they will cover.

I must emphasise that none of this was uncovered by the Financial Ombudsman Service, which had agreed with an initial £500 compensation payment.

Interactive Investor now admits that it should have offered more. So it will be paying a further £1,000 compensation, to give a total of £1,210, including the capital gains tax payment.

and don’t forget that you have a £20,000 annual Isa allowance, which should allow you to shelter the rest of the money again quite quickly. I HAVE a bank account with Santander, which I use for online transactions. I keep a very small balance in it.

Unfortunately, I forgot that my computer firewall payment was due. My statement showed that I was £37 overdrawn and, consequently, a £ 50 charge would be taken.

The cashier at my branch said that if I phoned up, it was likely that the charge would be cancelled. I did this, but then £50 was taken from my account anyway.

I was told this was because the debt had carried on to the next statement.

B. K., Surrey.

YOU have raised a serious issue that could impact people who rely on paper statements.

When your statement showed that you were overdrawn, you immediately deposited £150 to cover the overdraft.

That month’s charges were waived because this was the first time you had gone overdrawn.

However, you had by then entered a second statement period, so a further £ 50 was plonked on!

as a gesture of goodwill, Santander has now refunded the second charge.

But this is a glitch Santander — and probably other banks — should address, because anyone who relies purely on paper statements and does not realise they have gone overdrawn could not possibly avoid going into a second period and being hit by a further charge.

So a little mistake can result in a £100 fee.