Guidelines help with new ISA rules

Extra allowance
Extra allowance

Guidelines to help people who stand to inherit their spouse’s ISA allowance after their death under new rules have been published by savings providers.

Rules, which came into effect on Monday, grant people additional Isa allowances following the death of a spouse or civil partner, and financial services membership body TISA, together with the British Bankers’ Association and the Building Societies Association (BSA), has published the consumer guidance.

In December’s Autumn Statement, the Government announced that when an ISA saver died and they were married or in a civil partnership, the surviving partner would be entitled to an extra ISA allowance which is equal to their partner’s ISA balance on the date they died.

This extra allowance is called the additional permitted subscription (APS) allowance.

This allowance is not dependant on the surviving spouse inheriting the actual money or investments held within the ISA.

The APS allowance means that a deceased spouse can pass on their Isa “wrapper” with the tax advantages of saving into an ISA to their surviving partner, which they can use on top of their usual ISA allowance - which is £15,240 for the 2015/16 tax year.

People whose spouse or civil partner died on or after December 3 2014 are eligible.