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Inheriting an ISA

Often when a loved one dies, it can be very daunting dealing with their assets and considering the tax implications of inheriting their estate. As of 6th April 2015, anyone who lost their spouse or civil partner after 3rd December 2014 can claim their partner’s ISA savings tax free.

Currently individuals may put £15,240 into a cash or stocks and shares ISA during each tax year without paying tax on it.

Additional Permitted Subscription (APS)

As well as a normal ISA allowance, an individual may add a tax-free amount up to the value of the total ISA investments of their spouse at the date of death, called an “Additional Permitted Subscription”. For example, if a spouse died leaving £10,000 in a cash ISA and £20,000 in a stocks and shares ISA account, £30,000 would be added onto the surviving partner’s tax free allowance for the year.

The additional ISA allowance is not granted automatically and must be claimed by completing an APS Application Form. Eligible individuals will be able to obtain a form from the bank with which they wish to hold their account.

Should you have any queries in relation to managing a spouse’s estate please contact us on 01926 499889.