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Understanding the Additional Permitted Subscription Allowance

Understanding the Additional Permitted Subscription Allowance

A Guide to the APS Allowance

The loss of a spouse or civil partner is always a deeply emotional time, and on top of those feelings, there are often financial complexities to navigate. One lesser-known financial benefit for surviving spouses is the Additional Permitted Subscription (APS) Allowance for ISAs. If you’ve recently lost your spouse, understanding the APS Allowance could make a significant difference to your future financial wellbeing.

Who Benefits from the APS Allowance?

The APS Allowance was created to assist surviving spouses and civil partners in building or continuing their long-term savings journey. If your spouse held ISA accounts, you could inherit a valuable tax-free savings allowance in addition to your own annual ISA limit. It’s important to note that this additional allowance is available even if you do not inherit the funds within the original ISA(s).

Why You Should Know About the APS Allowance

  • Boost Your Tax-Efficient Savings. APS could massively accelerate your ability to save and grow your money without income or capital gains tax worries.
  • Increased Future Security. Using the APS Allowance wisely helps to create a more secure financial foundation for yourself.
  • Ease the Financial Burden. Inheriting your spouse’s ISA allowance can offer practical support on top of any immediate inheritance.

Harpur Wealth Management – Your Guiding Hand

Navigating the complexities of the APS allowance can be challenging, especially at an emotionally difficult time. At Harpur Wealth Management, we offer guidance and tailored wealth management solutions to help you use this valuable opportunity and optimise your financial wellbeing.

What is an ISA Additional Permitted Subscription (APS)?

The Additional Permitted Subscription (APS) is a special allowance designed for surviving spouses and civil partners of ISA holders. Here’s how it works:

  • Inheriting an Allowance, Not Just the Funds – When your spouse passes away, you gain an additional ISA allowance equal to the total value of their ISA accounts at the time of their death. Crucially, this allowance applies regardless of whether you specifically inherit the actual money within their ISA(s).

  • Flexibility for Your Financial Future – This means you have significant flexibility in how you choose to use your inherited ISA allowance.

  • Timeframe – You have three years after the date of death (or potentially longer if estate administration is extended) to make use of the APS allowance.

The APS in Simple Terms

The APS in Simple Terms

Think of the APS as a way to honour your spouse’s commitment to saving while benefiting your own financial well-being. It presents a substantial opportunity to build your long-term financial security within the tax advantages of an ISA, separate from any specific inheritance.

Who Qualifies for an Additional Permitted Subscription (APS) Allowance?

If you’re wondering whether you are eligible for the APS Allowance, here is a list of the guidelines:

 

  • Relationship. You must have been married or in a civil partnership with the deceased ISA holder.

  • Date of Death. The APS only applies if your spouse or civil partner passed away on or after December 3rd, 2014.

  • Living Together. At the time of death, you and your spouse/civil partner must have been living together. This generally means having a shared primary residence.

  • Separation Exceptions. The APS is not available if you were legally separated (court order or deed of separation) or if your separation was intended to be permanent.

  • Special Circumstance. If you or your spouse/civil partner were living in a care home at the time of death, eligibility for the APS may still be possible.

Important Time Limits

 

  • Standard Deadline. The APS allowance typically must be used within three years of your spouse/civil partner’s passing.

  • Estate Administration Extension. If administering the estate takes longer than 3 years, you have an additional 180 days after its completion to use the allowance.

Determining whether you’re eligible for the APS can involve various factors. The Harpur Wealth Management team can help surviving spouses navigate these details. Our advisors can assess your individual circumstances and provide you with clarity about your potential to benefit from the APS allowance.

Maximising Your APS Allowance – Options and Insights

Harpur Wealth Management advisors can help you to you’ve claim your APS allowance, then it’s time to put it to work for your financial future. You have significant flexibility in how you use this valuable opportunity:

 

  • Beyond Inherited Assets. A crucial fact that many people don’t realise is that you can use the APS to fund your ISA even if you don’t directly inherit the funds within your spouse’s original ISA(s).

  • Provider Choice. You don’t have to invest your APS with your deceased spouse’s ISA provider. You can explore different options to find the best fit for your needs, opening a new ISA if necessary.

  • Tailored Savings. Perhaps your spouse had a Cash ISA, but you’d like to build a Stocks and Shares ISA. The APS allowance allows this.

  • Rules and Regulations. Opening an ISA specifically for the APS won’t conflict with ISA limits per tax year – thanks to this allowance’s special status.

Harpur Wealth Management – Your Guide to Strategic APS Use

At Harpur Wealth Management, we don’t just secure your APS allowance. We’re committed to helping you understand the full array of options it presents. Our knowledge of ISAs and investment strategies allows us to work with you to create a personalised plan designed to help APS funds benefit your long-term financial security.

Let’s get started…

We hope this explanation has provided you with a clearer understanding of the Additional Permitted Subscription Allowance. If you would like our help to determine eligibility or pursue a claim on your behalf, why not schedule a consultation with a Harpur Wealth manager today – call us on 01234 924620.

Disclaimer

This article is for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions.

 

The value of your investment can go down as well as up and you may get back less than the amount invested.

 

‘The Financial Conduct Authority does not regulate taxation advice’

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