Charles Robertson – Senior Investment Manager
For most investors a Stocks and Shares ISAs is an excellent long-term savings vehicle given the associated exemptions from Income Tax and Capital Gains Tax.
Until recently, the ISA tax benefits were lost on the death of the account holder, but this changed in the 2014 Autumn Budget when the Chancellor announced a new measure called an Additional Permitted Subscription (APS). An APS allows the spouse or civil partner of the deceased ISA account holder to effectively ‘inherit’ the ISA.
The rules relating to an APS contribution are complicated and time limits are applied, but the benefits may be considerable given the potential capital sum involved. Therefore, it is worth seeking advice whenever an ISA is held in a deceased’s Estate. The number of people taking advantage of these new rules has fallen well below initial forecasts and we consider that this is very surprising given the potential tax benefits associated in making an APS.