”
“G I F T I N G
ISAs
W
here
a
person
holding an ISA dies
leaving a surviving
spouse or civil partner, that
surviving spouse or civil
partner is entitled to an
additional tax-free amount
up to the value held in the
deceased’s ISAs at the date
of their death, as well as their
own annual subscription. This
additional allowance is known
as the Additional Permitted
Subscription (APS). It has
been available since 6th April
2015 where the first death
was on or after 3rd December
2014.
The deceased and their
spouse or civil partner must
have been living together at
the date of the death. They
cannot have been legally
separated.
In the initial draft regulations
the survivor was limited
and could only make
their additional permitted
subscription with the ISA
manager who held the
deceased’s
ISA,
unless
permission was obtained
from
HMRC.
The
later
published Individual Savings
Account (Amendment No. 2)
Regulations 2015 were more
flexible. The survivor may now
make additional subscriptions
to an ISA manager other than
the deceased’s ISA manager
without
first
obtaining
HMRCs permission. This only
applies where the additional
subscription is made in cash;
permission is still required to
make a subscription of noncash assets to a different
manager.
The additional subscription is
available whether or not the
survivor actually inherited the
ISA. An additional subscription
made in cash can be made
either with cash assets
inherited from the deceased
or the survivors own available
cash. If the deceased held a
stocks and shares ISA then
the surviving spouse must
have inherited the non-cash
assets in order to subscribe
them in specie. If they did
not inherit the non-cash
assets then they cannot be
subscribed in specie, however
the survivor may subscribe
cash up to the same value.
There are specified time
limits in which the additional
subscription must be made.
These time limits differ
depending on whether it is
a cash subscription or an in
specie transfer.
A cash subscription must
be made within 3 years
of the death or within 180
days of the completion of
the administration of the
deceased’s estate, whichever
is the later.
A non-cash subscription
must be made with 180 days
of the beneficial interest in the
stocks and shares passing to
the surviving spouse or civil
partner.
Some additional points:
• Where the deceased
held multiple ISAs with
different managers the
survivor will have different
additional subscription
limits with each manager.
• Where the deceased
held multiple ISAs with
the same manager the
survivor’s APS will be the
combined value of all of
the deceased ISAs at
death.
• The
deceased’s
ISA
wrapper must still be
removed. It is still not
directly transferring the
ISA to the spouse.
• If a surviving spouse
subscribes
non-cash
assets in specie the
maximum amount they
can subscribe is the value
of the non-cash assets at
the date of the death. If
the assets have risen in
value since the death then
they cannot subscribe all
of the assets. If the value
has fallen then they may
make up the difference in
cash.
The Society of Will Writers
15