HMRC internal manual

Inheritance Tax Manual

Stocks and shares: valuation: ISAs

An Individual Savings Account (ISA) is a financial product for personal investors to contribute a limited annual amount to an investment account. Income from an ISA is exempt from Income Tax. Only shares listed on a recognised stock exchange may be held in an ISA, although this was relaxed somewhat in August 2013 when it was permitted to hold shares quoted on AIM (IHTM18331) in a stocks and shares ISA.

If the deceased held any shares in an ISA, the taxpayer will include them on the IHT411 (IHTM18011) or on form IHT417 if they are foreign (unless they are foreign shares listed on the London Stock Exchange). Value the shares in the same way as other shares.

ISAs replaced an earlier financial product called Personal Equity Plans (PEPs) in April 1999. PEPs existing at that time continued and from 6 April 2008 all remaining PEPs were reclassified as stocks and shares ISAs.

The taxpayer should declare and include separately any cash or insurance policies held in an ISA in the IHT400 (IHTM10021) or IHT100 (IHTM10650).