Inherited ISAs

0 Replies

It is now possible for a surviving spouse or civil partner to continue to enjoy the same tax free returns as their deceased spouse on their ISA funds. However, the surviving spouse does not automatically inherit their spouse’s ISA.  Irrespective of who the funds are left to, the surviving spouse applies for an Additional Permitted Subscription (APS). 

This is an increased ISA allowance equal to the deceased spouse’s ISA funds at the date of death, which can then be satisfied from savings.  The APS can be registered with an ISA manager of choice and it does not have to match the ISA type held by the deceased.

– It is possible to have multiple APS’s with different ISA providers. 
– It is important to consider where the most appropriate place is for the funds to end up when registering an APS. 

– Keeping everything under one roof can be very beneficial in terms of administration and monitoring. 

– It is also very beneficial to consider consolidation during lifetime as it offers all the same advantages and would simplify the administration of the Estate for the executors.

– The purpose of the APS is to maintain the income tax and capital gains tax benefits for the surviving spouse.  However, it is important to remember that while the ISA may escape inheritance tax on the first death due to the spousal exemption, it will eventually be caught in the inheritance tax net on the second death.

For more information or to make a contribution to your ISA please contact us. The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Some myths about tax free cashTrying to practice the preach

Share Your Thoughts

Your email address will not be published. Required fields are marked *