How can frozen tax allowances affect Kathy?
Results in Kathy paying more tax on same income, meaning less income in retirement
Is there a valid will/POA
No undue influence, especially on those who are vulnerable
Cashflow models are food for what?
Can stress test
Help plan for IHT as it shows estate value at certain time of deart
Kathy has global investments
Introduces currency risk
Update nominations following husbands death
Also apply for APS. complete administration in 2 years
Pensions
(ALWAYS ADD THIS ON PENSION QUESTIONS
Income tax free if dies before age 75 as she has LSDBA remaining
Free from IHT until 2027
When advisor gives advice on Kathy’s ESG he should explain:
Screening
Her main areas of ESG
Document any changes made
Why may global equities not be suitable for Kathy
Currency risk!!!!!
Likely dont satisfy her ESG needs
Require lots of monitoring/reviews
Explain APSa nd what can Kathy do
Continuing Account
Upon the death of an ISA holder, the ISA becomes a “continuing account”.
No new money can be added to the continuing account, but it can continue to grow capital and produce income tax-free.
The account remains in the “continuing” status for a maximum of 3 years from the date of death, or until the estate administration is completed (whichever comes first).
- APS (Additional Permitted Subscription)
APS allows the surviving spouse or civil partner to inherit the ISA and top up their own ISA allowance without affecting their annual limit.
To benefit from APS, the surviving spouse must complete an APS form with the late husband’s ISA provider, and the process must be initiated within 180 days of the ISA account being closed, or within 3 years and a day from the date of death. - Inheriting the ISA Investments
The survivor can inherit the investments directly via an in-specie transfer (which means the actual investments stay the same and are transferred as is).
Alternatively, the investments can be sold down to cash, and the proceeds can be inherited as cash. - Top-Up for the Surviving Spouse’s ISA Allowance
If the ISA is passed to other beneficiaries (e.g., children or other heirs), the surviving spouse can still top up their own ISA allowance by the higher of:
The value of the ISA at death.
The value of the ISA when the investments are passed on.
It’s important to obtain the value of the ISA at death, as this is the value that will be used for calculating the top-up. - Deadline for APS
If the ISA account is closed, the surviving spouse has 180 days from the date of closure to apply for APS and increase their ISA allowance.
If the ISA is not closed, the surviving spouse has 3 years from the date of death to apply for APS and increase their ISA allowance. - Surviving Spouse’s ISA Allowance
The surviving spouse can use their own ISA allowance, plus the additional allowance granted under APS (based on the higher value between the ISA value at death or the value at the time the investments are transferred).
