Additional Permitted Subscriptions (APS)

Overview

From the 6th April 2015, new HMRC rules give the surviving spouse an 'additional permitted subscription' (APS) equal to the value of the deceased's ISA holdings. Additional permitted subscriptions are available in respect of deaths on or after the 3rd December 2014. The deceased and the surviving spouse must have been living together at the date of death. That is, not separated under a court order, under a deed of separation, or in circumstances where the marriage or civil partnership has broken down.

Additional permitted subscriptions:

Initial enquiry

The value of the deceased's ISA can be requested from the ISA Manager providing the request is made in writing and contains the following information about the deceased:

Additional permitted subscriptions are limited to the value of the deceased investor's ISA at their date of death. If the value of the ISA falls between the date of death and the date of distribution, there will be a shortfall between the value of assets transferred and the special ISA allowance- in this situation the surviving spouse can choose to make up the difference with additional money. Alternatively, if the value of the assets increase during administration, it will not be possible to subscribe them all to the ISA.

Where the deceased had a number of ISAs with a Manager, there will be a single additional subscription based on the combined value of those ISAs at the investor's date of death.

Where the deceased held ISAs with a number of different Managers, the surviving spouse will have additional permitted subscriptions limits with each Manager.

Making additional permitted subscriptions

The surviving spouse can make an APS with either the Manager who held the deceased's ISA or another Manager who agrees to accept the subscriptions, although this would have to be made in cash only.

Once an APS has been made with one Manager, any further APS up to the limit must be made with the same Manager.

The subscription can be made to a Stocks & Shares ISA, which the surviving spouse holds with that Manager, or to a new ISA opened for specifically for this purpose.

Where a surviving spouse inherits non-cash ISA assets ie. stocks and shares, these may be used to make an APS 'in specie' ie. without having to be sold and the subscription made in cash, provided these assets were the ones held at the date the Manager was notified of the investor's death. The option of an 'in specie' subscription is not available if the spouse decides to make an APS to a Manager other than the one who held the ISA of the deceased.

Where the deceased held a combination of Stocks & Shares and cash ISAs with the same Manager, the surviving spouse will have a single APS limit with that Manager.

Where the assets change after the ISA Manager is notified of the death of the investor as a result of a corporate action, those 'new' assets will be eligible for in-specie transfer.

A series of subscriptions up to the value at the date of death can be made provided, in aggregate, they do not exceed the additional permitted subscription limit (the value of the deceased's ISA at their date of death).

Are there any time limits?

Additional permitted 'in specie' subscriptions with non-cash assets must be made within 180 days. Where the estate makes an interim in specie distribution(s) followed by a final distribution, each will have a 180 day window for subscriptions to be made.

The time limit runs from the date the surviving spouse becomes beneficially entitled to the non-cash assets.

For distributions prior to 6 April 2015, in respect of deaths between 3 December 2014 and 5 April 15, the 180 days will run from 6 April 2015.

The time limit for making cash subscriptions ends 3 years after the date of death, or if later, 180 days after the administration of the estate is complete.

Does Jarvis allow Additional Permitted Subscriptions?

Yes - you will need to open an ISA account if you do not currently have one with Jarvis. Please click here to apply for an ISA.

What forms do I need to fill in?

If you have an ISA with Jarvis, and your spouse had an ISA with Jarvis and you wish to deposit the Additional Permitted Subscription allowance with ourselves, you will need to complete an APS application form. Complete this form and return the original to Jarvis.

I wish to transfer my spouse's ISA from another Manager to my ISA at Jarvis - what form do I need to complete?

As shares cannot be transferred from one ISA Manager to another, any investments with the existing Manager will need to be sold and the ISA transferred as cash. Please complete the transfer form and return this to Jarvis.

I have an existing ISA with Jarvis and would like to add more funds using my Additional Permitted Allowance - what do I need to do?

To top up your ISA allowance using additional permitted subscriptions (ie. you are not transferring in an ISA but topping up against the value of the deceased's ISA), you simply need to complete a Declaration Form and return this to our office. Payments must be made by cheque or bank transfer to ensure that this is added to your ISA under the APS rule.

X-O.co.uk is a brand name of Jarvis Investment Management Ltd (Jarvis), which is authorised and regulated by the Financial Conduct Authority. Jarvis is a member of the London Stock Exchange and NEX Exchange, and is an HM Revenue & Customs Approved ISA Manager. Registered office: 78 Mount Ephraim, Tunbridge Wells, Kent, TN4 8BS. Registered in England number 1844601. VAT registration number 680 0400 74