ISA changes

Budget 2015 introduced a number of changes for ISAs but two of these may be of particular importance to clients.

Additional ISA subscriptions available to surviving spouses

A subscription to an account other than a junior ISA account is permitted where:

• an account investor dies on or after 3 December 2014 leaving a surviving spouse or civil partner (S);
• a subscription is made by S to an account or accounts managed by a single account manager or the deceased's account manager in relation to non-cash assets;
• the subscription is within the permitted period;
• S and the deceased were living together at the date of the deceased's death and
• where the subscription comprises non-cash assets, the deceased held an account either comprising or including non-cash assets at the date of the deceased's death, S inherits all or part of those assets and S makes a subscription comprising those assets or any part thereof; and
• throughout the period beginning with the day on which the deceased's account manager was notified of the deceased's death and ending immediately before the subscription is made, title to those assets is vested in the deceased's account manager, that manager's nominee or jointly in one of them and another.

The amount available to reinvest is the value of the account(s) at the date of the deceased's death, excluding junior ISA accounts.

The permitted period is:

• in the case of a subscription comprising non-cash assets, the period beginning with distribution to S by the deceased's estate of the non-cash assets and ending no more than 180 days thereafter; and
• in the case any other subscription, the period beginning with the date of the deceased's death and ending on the later of three years thereafter or no more than 180 days after administration of the estate is complete.

Help to Buy: ISA

The Government has announced a new product to help first time buyers. In broad terms, people saving for their first home through a Help to Buy: ISA will be able to save up to £200 a month into their account from autumn 2015. The Government will then top this amount up by 25%, capped at a total of £3,000 on £12,000 of savings. Further details are as follows:

• available at 16 years old;
• a monthly maximum saving limit of £200, with an opportunity to deposit an additional £1,000 when the account is first opened;
• no limit on how long the account can remain open;
• the saver can only subscribe for one cash ISA per year;
• the Government bonus can only be put towards a first home located in the UK with a purchase value of £450,000 or less in London and £250,000 or less in all other parts of the UK;
• the Government bonus can only be used towards a property that is being used for the first time buyer to live in as their only residence and not buy-to-let;
• the Government bonus can be claimed at any time, subject to a minimum bonus amount of £400; and
• savers will be able to open a Help to Buy: ISA for a four-year period after the date the scheme formally opens.

Keep your clients informed so that they maximise their tax position.