# What happens to a Lifetime ISA when someone dies?

> Quick answer · Last updated 4 July 2026

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## In short

A LISA forms part of your estate for inheritance tax — unlike most pension pots. Beneficiaries receive the value (including bonuses) subject to the estate's tax position. ISA tax advantages end on death.

Spouses may receive additional ISA subscription allowances to reinvest inherited ISA value in some circumstances — check current HMRC rules with your executor.

The 25% withdrawal penalty does not apply on death; the provider pays the estate or beneficiaries per the will or intestacy rules.

If you hold a joint life policy or dependants rely on the LISA, consider whether pension or life insurance wrappers suit better for estate planning.

See LISA withdrawal rules and wills guide for coordination with executors.

## Related

- [LISA withdrawal rules](https://moneyguide.org.uk/savings/lifetime-isa-withdrawal-rules/)
- [Wills and intestacy](https://moneyguide.org.uk/family-life/wills-and-intestacy/)

## Primary source

gov.uk/lifetime-isa

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.