ISA additional permitted subscription allowance
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.
An additional permitted subscription (APS) is available if your spouse or civil partner had an ISA and has died since 3 December 2014. It gives you an extra tax-free ISA allowance, equivalent to the value of their ISA.
This additional allowance doesn’t count towards your normal ISA subscription limit. You’ll still have your annual ISA allowance, which is £20,000 for the 2023-24 tax year. For example, if your partner had £20,000 in ISAs when they died, the APS would let you pay £40,000 into ISAs this tax year.
You can use the allowance either in one go or smaller sums over time. You’ll have three years from the date of death, or 180 days from the completion of administration of the estate, whichever is later, to use your APS.
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 had ISAs with. If they held more than one ISA 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 us will be provided separately.
Using the APS
You’ll need to request the value of your APS allowances from each ISA provider. Each subscription you make to use them 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 third anniversary of the date of death of your spouse
When you apply for your APS valuation, we’ll give you either an APS 1, if APS 2 doesn’t apply due to timing of the application, or the higher of the two values if both apply.
If you receive an APS 1 before APS 2 is applicable, you will no longer be eligible for the APS 2 calculation.
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 don’t have to use your APS allowance in the same type of ISA as your deceased partner.
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 use the APS allowance just with cash, 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 pay the money in once the transfer is complete.
If you want to transfer your APS allowance to another provider, you’ll need to make sure they’ll let you use it. Not all providers allow for the APS, but if they don’t, they must let you 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 investments. 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 if deadlines are short.
Find out more about the drawbacks and risks of transferring your investments.
Things to think about
You need to decide whether you want to use the same type of ISA as your partner, and whether to stay with the same provider. If you want to transfer assets that are 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 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.
APS allowances and our ISAs
If your spouse or civil partner had ISAs with us and you want to use the APS allowance, please read our brochure on APS [PDF, 199KB] and use our application form [PDF, 625KB] to ask for the allowance. You can also call us on 0800 279 36671 and we'll send you the forms you need.
With 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 us without selling them and you don’t already have an ISA with 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.