-

APS ISA - Additional Permitted Subscription ISA

The value of investments can fall as well as rise and you could get back less than you invest. If you’re not sure about investing, seek independent advice.

Since April 2015, spouses and civil partners of ISA holders have been entitled to an additional ISA allowance, equivalent to the value of their deceased partner’s ISA. It’s called the Additional Permitted Subscription (APS) and it’s available if your spouse or civil partner has died since 3 December, 2014.

This additional allowance, as the name suggests, doesn’t count towards your normal ISA subscription limit. You’ll still have your annual ISA allowance, which is £20,000 for the 2018-19 tax year. For example, if your partner’s ISAs stood at £20,000 when they died, the APS would allow you to pay £40,000 into ISAs this tax year.

You can use the allowance in one go or as separate lump sums. There’s a time limit though, you must use your APS within three years of the date of death, or within 180 days of the completion of administration of the estate, if this is later.

Qualifying for the APS

You need to have been married or in a civil partnership with the ISA holder and not separated at the time of death. You can’t use the APS allowance if you were separated by a court order, a Deed of Separation, or any other circumstances that were likely to become permanent. You don’t have to be a UK resident – you can still open an ISA to use the APS allowance, but you can’t make subscriptions using the annual ISA allowance.

You’ll have separate APS allowances with each ISA provider that your spouse or civil partner held ISAs with. If they held multiple ISAs with the same provider, the value will be combined to give one APS allowance with that provider.

Your APS allowance for any cash ISAs your spouse held with Barclays Bank will be provided separately.

Using the APS

You’ll need to request the value of your APS allowances from each ISA provider. They’ll confirm the value of your APS allowances and you can then make subscriptions to use them. Each subscription must be accompanied by an APS declaration. If investments were held in one or more ISAs, you’ll need to get a probate valuation, which can take a couple of weeks.

Importantly, the APS is independent of the assets held in the ISAs. That means even if the assets are passed to another member of the family, you can still apply for the APS and fund it using cash you already hold, or money that you’ve inherited.

From April 2018 changes to the APS calculation have been introduced. There is now an APS 1 and APS 2 which are worked out as:

APS 1 – this is calculated at the date of death of your spouse.

APS 2 – this is calculated at the earlier of:

  • The completion of the deceased’s estate
  • The closure of the continuing account 
  • The 3rd anniversary of the date of death of your spouse

When you apply for your APS valuation we will provide you with either APS 1 if APS 2 doesn’t apply due to timing of the application or the higher of the 2 values if both APS 1 and APS 2 apply.

If you start to utilise APS 1 prior to APS 2 being applicable you will no longer be eligible for the APS 2 valuation.

Which type of ISA?

You can use your APS allowance in a cash ISA, an investment ISA, an innovative finance ISA, a lifetime ISA or a combination of these with the same or multiple ISA providers. You’re not restricted to using your APS allowance in the same type of ISA as your deceased partner held.

If your spouse or civil partner’s ISA included investments and you inherit them, you’ll need to use your APS allowance with the same provider if you want to transfer the investments ‘in specie’ – without selling them – to your own ISA. But you can only do this with the provider who already holds the assets, so you may need to open a new ISA to do so.

If you want to fund the APS allowance in cash alone, you can do this with your spouse or civil partner’s ISA provider, or transfer the APS allowance to another provider, then open an ISA and fund it once the transfer is complete.

If you want to transfer your APS allowance to another provider you’ll need to make sure they’ll allow you to use it. Not all providers allow for the APS, but if they don’t, they must allow you to transfer it to another provider of your choice.

However, bear in mind that there are drawbacks and risks to transferring your ISA. There’ll be a period during the transfer when you won’t be able to sell existing investment holdings. There may also be delays in receiving dividends, other income and information, as well as delays to exercising shareholder concessions or receiving notification of voting rights or corporate actions, such as rights issues. These could affect your ability to respond where deadlines are shorter.

Find out more about the drawbacks and risks of transferring your investments

Key things to think about

You need to decide whether you want to use the same type of ISA and whether to stay with the same provider. If you want to transfer assets still invested you’ll need an ISA with the same provider. However, once you’ve used your APS allowance you can then transfer your ISA balance to another provider under the normal ISA transfer rules.

Remember, if you’ve used some of your APS allowance already, you won’t be able to transfer any of the remaining APS allowance to another provider. You’ll need to continue using the remainder of that APS allowance with your existing provider, or you’ll lose it.

APS allowances and Barclays ISAs

If your spouse or civil partner had ISAs with Barclays and you want to use the APS allowance, to begin with read our APS brochure [PDF, 199KB] and access the APS application form [PDF, 625KB] to apply for the allowance, or call us on 0800 279 36671. You can then apply for the APS allowance using the forms provided.

With Barclays Smart Investor, you can use the APS allowance in an existing ISA. However, if you want to use your partner’s existing investments held with Barclays without selling them and you don’t already have an ISA with Barclays Smart Investor, you’ll need to open one.

Remember that tax rules can change and whether or not an ISA will benefit you depends on your individual circumstances. Also remember that the value of investments can fall as well as rise and you may get back less than you invest. Investing isn’t for everyone. If you’re not sure whether a cash ISA or investment ISA is suitable for you, please seek independent financial and tax advice.