A new Freedom of Information request has revealed that last year only 21,000 people took advantage of a tax scheme that allows a surviving partner to expand their ISA allowance to include funds from their deceased spouse’s accounts.
It is estimated that 150,000 people a year inherit an ISA from a spouse, which means that only 14 per cent are using the little-known incentive.
Introduced way back in 2015, the scheme, known as the ‘additional permitted subscription’, allows the surviving spouse to collect their partner’s savings without penalty during that tax year.
Official figures show that the use of the tax perk remains low since its launch, with only 61,000 partners claiming the allowance so far.
However, HMRC has said that of those that did use the subscription, the average amount that bereaved spouses received via the extra allowance was £55,000.
Unfortunately, not all providers are obliged to accept a transfer of the allowance, which is why current figures may remain so low.
The team at JW Hinks are happy to partner with your firm to provide your clients with tailored IHT and financial planning advice in order to mitigate their tax burden. For further information, please contact us.