by Simon Gompertz Working Lunch's business correspondent

The last thing you want to do when you have just had a bereavement is to worry about tax matters.

But a number of Working Lunch viewers are getting into a tangle over tax just after losing a close relation.

One major source of misunderstanding is the treatment of tax-free Individual Savings Accounts or Isas.

Outstanding investments

Pauline from Cornwall has written to complain that she is being told she has to pay tax on her late husband's outstanding investments.

In fact, the tax-free status of Isas should remain valid until the holder dies.

Anyone who inherits money or investments would pay tax on the income or capital gain, but only where it is incurred after the date of death.

Probate price

Another viewer from Lancashire lost her husband in May. She relates how she has been told that his Isa and Pep investments have to be valued at today's prices, even though the value has fallen substantially in recent weeks.

"The bank should honour the value on the day he died," she argues.

It's true that solicitors putting a value on a deceased person's estate would expect to price shares and investments at the date of death.

Probate price is the price of investments on the day of death

This is called the probate price. Of course, it is easy to find if you can lay a hand on the newspapers for the day in question, but you can also retrieve it from stockbrokers, at a price, or from the Stock Exchange.

Following the terms of the will, shares could either be sold and the proceeds divided among the beneficiaries, or they can simply be passed on and ownership transferred.

However, banks or investment managers wouldn't normally have to make up any losses incurred if share-based investments fall in value after the owner has died.

Whether or not the investments are held in a tax-free Isa, it is the investor who takes the risk that the stock market will fall.