Page 44 - Phonebox Magazine April 2016

Following the introduction of Personal Equity Plans (PEPs) in 1987 and their re-incarnation as Individual Savings Accounts (ISAs) in 1999, they have been a bedrock for investment savings for millions in the UK. Their preferential tax treatment and ease of access have made them extremely popular and many investors now have seven gure sums invested in them. In fact, back in 2013, Brewin Dolphin disclosed that it had a client with an ISA worth over £6,000,000*.
Married couples will have often used both allowances over the years, only for half of the holdings to be removed from the ISA wrapper when one spouse dies. However, since 6 April 2015, surviving spouses have been able to invest the value of the deceased spouse’s ISA into their own ISA. This is achieved using a tax break called the Additional Permitted Subscription (APS). The APS is equal to the value of the deceased spouse’s ISA at the date of death. This is then available to the survivor to use on top of the usual annual allowance, within 3 years of the date of death.
It is important to remember that the assets originally held in the deceased’s ISA do not have to be used against the APS. The allowance can be used up with cash from elsewhere. The APS can be particularly bene cial for those couples who have built up ISA portfolios and use them to provide a tax e cient income in retirement.
If you would like to discuss or review your own investment plans then please call us. Initial meetings are without charge and we are happy to come to see you in the comfort of your own home. See our advert below.
This article does not constitute advice and should not be taken as a recommendation to undertake any course of action mentioned without consulting a relevant professional.
* www.telegraph.co.uk 28th March 2013
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44 Phonebox Magazine | April 2016
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