What is the APS and how does it affect Smart Investor ISAs?
ISAs can be passed on to a surviving spouse or civil partner upon death and they should be able to retain the tax benefits. This is because ISA rules grant the surviving partner an extra allowance for their own ISA, known as an ‘additional permitted subscription’ (APS) allowance.
The APS allowance is equivalent to the amount held in ISAs on death and doesn’t affect your normal ISA allowance.
You can have separate APS allowances with each of the ISA providers that your deceased spouse or civil partner held ISAs with. If your spouse or civil partner held multiple ISAs with the same ISA provider, the value of these ISAs will be combined to give one APS allowance with that ISA provider.
You can transfer your APS allowance to another ISA provider if you don’t want to use it with your spouse or civil partner’s ISA provider.
You’ll need to request the value of your APS allowances from each ISA provider that holds your spouse or civil partner’s ISA accounts. They’ll confirm the value of your APS allowances and you can then make subscriptions to use the allowances. Each subscription must be accompanied by an APS declaration.
Barclays Smart Investor does not offer accounts to non-UK residents. You can open an ISA with providers who offer a service for non-UK residents and still use your APS. However, you won’t benefit from having an annual ISA allowance too.
You do not have to inherit the ISA assets to be able to use the APS allowance. The APS allowance and your spouse’s ISA assets are treated separately. You can fund your APS allowance through a transfer of investments from your partner’s ISA if you’ve inherited them or from cash you already hold.
Your APS allowance is calculated based on the value of your spouse or civil partner’s ISA on the date of their death (APS 1) or the earliest of the completion of the deceased estate, the closure of the continuing account or the 3rd anniversary of the death of your spouse (APS2).
Opening a new ISA
With Barclays Smart Investor you can use the APS allowance in an existing ISA or you can open a new ISA if you don’t already have one.
To transfer your spouse or civil partner’s existing ISA investments held with Barclays Smart Investor without selling them you must move them into an Investment ISA held in Barclays Smart Investor. You cannot transfer them as stock to another provider as part of APS.
However, once you’ve subscribed to your APS allowance in your own ISA you can then transfer the ISA cash or stock in the normal way to a different provider.
If any assets can’t be transferred to Barclays Smart Investor, as we’re unable to accept them, we’ll sell any investments that can’t be transferred and the proceeds will be moved as cash instead.
If you’re unsure about any particular investments you hold, it’s a good idea to check with us before you arrange a transfer.
A provider doesn’t have to allow APS subscriptions into ISAs. However, if they won’t allow you to use your APS allowance with them, they must allow you to transfer it to another provider of your choice.
To get an APS allowance you need to apply to the provider or providers that your spouse or civil partner held their ISAs with. If they had multiple ISA accounts with separate ISA providers, you’ll need to apply to each provider separately.
If you wish to use your APS allowance with a different ISA provider to the one your spouse or civil partner held their ISA with, you’ll need to arrange a transfer of your APS allowance to your new provider.