Make the Most of Your ISA with Additional Permitted Subscriptions (APS)

As your financial planners, we are committed to ensuring you have all the tools and information you need to make the most of your investments. This article highlights an often overlooked but incredibly valuable opportunity within the Individual Savings Account (ISA) framework: the Additional Permitted Subscription (APS).

What is an Additional Permitted Subscription (APS)?

Losing a loved one is never easy, and financial matters can often add to the burden. In recognition of this, the UK government introduced the APS in April 2015, allowing the surviving spouse or civil partner of a deceased ISA holder to inherit their ISA tax benefits. Essentially, it enables you to make additional ISA contributions, over and above the annual allowance, using the ISA allowance of your deceased spouse or civil partner.

How Does APS Work?

Here’s a simple breakdown:

1. Eligibility: You are eligible for APS if you were living with your spouse or civil partner at the time of their death, and they held an ISA at the time of their passing.
2. Allowance Amount: The APS allowance equals the value of the deceased’s ISAs at the date of death. For example, if your partner’s ISAs were valued at £100,000, you could contribute up to an additional £100,000 to your own ISAs using the APS allowance.
3. Time Frame: You can use the APS allowance within three years of the date of death or 180 days after the administration of the estate is complete, whichever is later.

Why Should You Consider APS?

1. Tax Efficiency: The APS allowance lets you maintain the tax-advantaged status of the funds that were in your partner’s ISA, providing potential growth free from income and capital gains tax.
2. Flexibility: You can invest the APS allowance into a Cash ISA, Stocks and Shares ISA, or an Innovative Finance ISA, depending on your risk appetite and financial goals.
3. Peace of Mind: It ensures that the financial plans and investments you and your partner made can continue to work towards your shared financial goals.

How to Use Your APS Allowance

Using the APS allowance involves a few straightforward steps:

1. Contact the ISA Provider: Reach out to your partner’s ISA provider to inform them you want to use the APS. Each provider will have their own forms and procedures.
2. Open an APS ISA or Contribute to an Existing One: You can either open a new APS ISA with the deceased’s provider or transfer the APS allowance to your existing ISA provider, if they allow APS contributions.
3. Complete the Paperwork: You’ll need to provide documentation such as the death certificate or Grant of Probate and a declaration form from the ISA provider.

We’re Here to Help

Navigating the intricacies of APS can be daunting, but you don’t have to do it alone. If you think you might be eligible for an APS allowance or simply want to explore this option further, please don’t hesitate to get in touch. We can work together to review your situation, complete the necessary paperwork, and make the most of this valuable opportunity.

Remember, taking advantage of the APS allowance could make a significant difference in your financial journey. Let’s ensure that you’re fully equipped to benefit from every available opportunity.

Feel free to contact us if you have any questions or need further assistance. Your financial well-being is our top priority, and we’re here to support you every step of the way.