Additional permitted subscription: inheriting a spouse's ISA allowance

When someone dies leaving a spouse or civil partner, the survivor can be given an extra ISA allowance on top of the usual annual limit. This is called an additional permitted subscription, often shortened to APS. It was introduced following the 2014 Autumn Statement and applies where the death occurred on or after 3 December 2014¹. The allowance is equal to the value of the deceased's ISA savings, and crucially it is available even if the survivor does not inherit the ISA money itself².

The size of the allowance is set by the value of the deceased's ISA investments held with a single account manager at the date of death. Where the deceased held more than one account with the same manager, the values are combined, and sums held in a Junior ISA are excluded². Since 6 April 2018, for deaths on or after that date, the allowance is the higher of the value of the investments at the date of death and their value when the account stopped being a continuing account of a deceased investor³.

The allowance does not eat into the survivor's own £20,000 annual ISA allowance: the rules permit these additional subscriptions outside the normal subscription limit⁴. There are deadlines, however. A cash subscription must normally be made within three years of the death, or within 180 days of the estate's administration being completed if that is later⁵.

An allowance, not the money

The most common misunderstanding about the additional permitted subscription is that it involves receiving the deceased's ISA money. It does not. The APS is an allowance: a permission to pay new money into your own ISA, or to move inherited investments into it, up to a ceiling set by the value of the deceased's ISAs. The ISA money and investments themselves pass under the will or the intestacy rules like everything else in the estate, and may go to the survivor or to anyone else. The allowance exists either way².

The legislation makes the point directly. A subscription is permitted where the account investor died on or after 3 December 2014 leaving a surviving spouse or civil partner, that person subscribes within the permitted period, and the couple were living together at the date of death⁶. Nothing in those conditions requires the survivor to have inherited the ISA balances. The explanatory memorandum that accompanied the rules confirms that the additional subscriptions sit outside the normal subscription limit at ISA Regulation 4ZA, which is what makes this a genuine extra allowance rather than a transfer of the deceased's own tax shelter⁴.

There is one important exception to this separation. Where the subscription is to comprise non-cash assets, in other words the actual investments rather than cash, the survivor must inherit all or part of those assets, and title to them must remain vested in the deceased's account manager, its nominee, or jointly, throughout the period from the notification of death until the subscription is made². So paying in cash needs no inheritance at all, but moving the investments themselves requires that those specific investments have come to you.

This structure has practical consequences. A survivor who inherits nothing from the ISA, or whose spouse left the ISAs to children, still holds the allowance and can fund it from any source: savings, an inheritance from elsewhere, or the proceeds of selling assets. A survivor who does inherit the investments can either move them into an ISA under the allowance or sell them and pay in cash. The choice affects timing, because the two routes have different deadlines, covered later on this page.

The idea of giving an extra allowance that does not count towards the normal limits is not new. When the Icesave bank failed in 2008, the regulations that followed allowed affected savers to subscribe the closing balance of their Icesave account to a new ISA, and that subscription "shall not count towards the subscription limits in regulation 4(2) or (3)"⁸. The APS works on the same principle, at a scale set by the deceased's holdings rather than a failed bank's balances.

Who can claim it, and who cannot

The conditions are set out in regulation 5DDA of the Individual Savings Account Regulations 1998, inserted in 2015. To claim an additional permitted subscription, all of the following must be true⁶:

• The deceased was an ISA investor who died on or after 3 December 2014.
• You are the surviving spouse or civil partner of the deceased.
• You and the deceased were living together at the date of death.
• You subscribe within the permitted period.

The "living together" condition is the one that catches people out. It is not enough to have been married or in a civil partnership: the rules require the couple to have been living together at the date of death, so a spouse who had permanently separated before the death does not qualify, even if the marriage or partnership was never formally dissolved⁶. This is stricter than some other bereavement provisions. Marriage Allowance, for example, can be claimed after a partner's death by the surviving spouse or by the personal representatives of a deceased party⁹, and HMRC guidance confirms that if your partner has died since 5 April 2022 you can still claim it by phoning the Income Tax helpline¹⁰. Bereavement benefits similarly turn on the relationship having existed rather than on shared residence at death¹¹. For the ISA allowance, though, the living-together test is explicit in the legislation.

The date condition is equally firm. The rules "apply in relation to deaths on or after 3 December 2014"⁴. A partner who died on 2 December 2014 leaves no APS entitlement, whatever the size of their ISA savings. At the other end, there is no upper limit on how recent the death can be, provided the permitted period has not expired.

A few further points on eligibility:

• The allowance belongs to the survivor personally. It cannot be assigned to anyone else, and a surviving partner who dies before using it leaves no APS to their own estate.
• An additional permitted subscription cannot be made to a Junior ISA account, so the allowance cannot be used for a child's savings².
• To subscribe to any ISA other than a Junior ISA, the account manager must have been provided with your national insurance information, and must have no reason to believe you do not meet the statutory requirements¹². In practice this means having a national insurance number to hand when you open the receiving account.
• Common-law partners do not qualify. The rules name spouses and civil partners only⁶.

How much can be paid in: the higher of the value at death or at closure

The amount of the allowance is fixed by legislation. Where the deceased held a single account with a single account manager, it is the value of that account at the date of death. Where the deceased held more than one account with the same manager, it is the combined value of those accounts at the date of death. Sums held in a Junior ISA are excluded from the calculation².

Since 6 April 2018, the measure has been the more generous of two figures. Regulations made in 2017 provided "for the additional permitted subscription available to spouses and civil partners to be the higher of the value of investments held in a deceased's account on the deceased's death and on the account ceasing to be a continuing account of a deceased investor"³. For deaths on or after 6 April 2018, that means the allowance is the higher of the value at death and the value at closure¹³.

Why does this matter? Between a person's death and the closure of their ISA accounts, the investments inside a stocks and shares ISA can rise or fall, and interest can accrue in a cash ISA. Without the 2017 change, a survivor whose spouse's investments had grown after death would have had an allowance based on the lower, death-date value. With it, the growth is captured. The rule does not work in reverse as a penalty: if the investments fell after death, the allowance stays at the higher death-date value, because the measure is the higher of the two figures.

Note what the allowance is not. It is not a percentage or a multiple of the deceased's ISA, and it is not linked to the survivor's own savings. It is a pound-for-pound match of the deceased's ISA value with each account manager, and nothing else. If the deceased had no ISAs, there is no APS, however large the rest of the estate.

APS sits on top of the £20,000 annual ISA allowance

The normal ISA annual subscription limit is £20,000, and the government has confirmed it will remain at £20,000 until April 2031¹⁴. The official policy statement on the cash ISA limit changes describes the position plainly: "The ISA Regulations currently provide a single overall annual ISA subscription limit of £20,000"⁷.

An additional permitted subscription does not touch that figure. The explanatory memorandum states that the new regulation permits "additional ISA subscriptions (outside the normal subscription limit at ISA Regulation 4ZA)"⁴. In practice this means a survivor could, in a single tax year, pay their full £20,000 into their own ISAs and also pay in the whole of the APS allowance, however large it is. There is no requirement to spread the APS across tax years, and no requirement to use it in the tax year of the death.

Two related rules are worth knowing:

• Since 6 April 2024, an individual may subscribe to more than one ISA of the same type in a tax year, and partial transfers of current-year subscriptions are allowed¹⁵. The House of Commons Library briefing describes the 2024 regulations as "permitting an individual to subscribe to more than one ISA account of the same type in a tax year, allowing the partial transfer of subscriptions made in the current tax year"¹⁷. This makes it easier to split an APS across accounts and providers.
• Unused allowance never rolls over in the ordinary ISA system, and the same is true here: any part of the APS not used within the permitted period is lost.

Deadlines: three years from death or 180 days after the estate is settled

The permitted period depends on what is being subscribed. For a subscription of cash, the period begins with the date of the deceased's death and ends at the later of two points: no more than three years after the death, or no more than 180 days after the administration of the estate is complete⁵. The legislation puts it as "the period beginning with the date of the deceased's death and ending either no more than 3 years thereafter; or no more than 180 days after administration of the estate is complete", whichever is the later¹.

For a subscription comprising non-cash assets, the investments themselves, the window is different and shorter: the period begins with the distribution of those assets to you by the deceased's estate and ends no more than 180 days thereafter¹.

The "whichever is the later" rule protects survivors whose estates take a long time to administer. Estates with property, business interests or disputed wills can take more than three years to settle. If administration is still ongoing at the third anniversary of the death, the cash window stays open until 180 days after administration is complete⁵.

There were transitional deadlines for deaths in the earliest months of the rules. Where the deceased died between 3 December 2014 and 5 April 2015, a cash subscription had to be made no later than 5 April 2018². For a subscription of non-cash assets where the death fell in that same period, the legislation sets a deadline of no later than 2 October 2015². The two dates come from the same instrument and are not reconciled there, so both are given as the legislation states them. In practice these transitional windows have long passed, and they matter only to readers handling very old estates.

A separate but similar provision shows how the 180-day structure is used elsewhere in the ISA rules. Where an investor closes a Help to Buy ISA because a house purchase has fallen through, a subscription of cash back into another ISA is permitted within a permitted period, provided the investor has given the account manager evidence of the failure of the purchase¹⁸. That is a different allowance for a different situation, but it shares the same design.

Paying in cash or transferring the investments

There are two ways to use an APS: pay in cash, or move the inherited investments themselves into your ISA. The cash route is simpler. You fund the subscription from any source, up to the allowance figure, within the cash deadline. The investments route requires that you inherited all or part of the non-cash assets and that title remained vested in the account manager or its nominee from the notification of death until the subscription, and it must happen within 180 days of distribution².

Which route suits a particular survivor depends on circumstances, and the rules on moving money between ISA types shape the choice:

• Subscriptions from a cash ISA may be transferred to a stocks and shares ISA if the investor is 18 or over¹⁹.
• From 6 April 2027, subscriptions held in a stocks and shares or innovative finance ISA may be transferred to a cash ISA if the account investor is 65 or over at the end of the year²⁰. The draft legislation sets this out: current and previous years' subscriptions from those accounts may go to "a cash account (if the account investor is 65 or over at the end of the year)"²¹.

The Lifetime ISA has its own APS rule, and it is more generous in one respect. The spouse or civil partner of a deceased Lifetime ISA holder has an additional permitted subscription equal to the amount held in all their ISAs at death, including any government bonus, and no government charge applies on withdrawals²⁴. Note the difference in how the amount is measured: for a Lifetime ISA, the technical note describes the APS as equal to the amount held in all their ISAs at death, rather than being worked out manager by manager.

If the inherited investments have fallen in value since the death, the allowance itself is unchanged, because it was fixed at the higher of the death-date or closure value³. But moving the fallen investments uses allowance that may exceed what the investments are now worth. A survivor in that position can pay in cash up to the full allowance figure instead, if they have the money to do so, since the allowance does not depend on inheriting the assets².

Using a different ISA provider

You do not have to use the provider that held your spouse's ISAs. The explanatory memorandum describes the mechanism: "New ISA Regulation 5DFB sets out the process that will apply where an eligible individual wishes to make an additional subscription to an ISA provider other than the provider which held the deceased's ISA"⁴. This matters because the deceased's provider may not offer the type of ISA the survivor wants, may charge more, or may not accept APS business at all.

The same memorandum also created a right to information: "New ISA Regulation 5DFC will, in specified circumstances, oblige the ISA provider who held the deceased's ISA to supply an eligible individual with details of the value of the additional subscription they might make"⁴. So a survivor does not have to guess the size of the allowance: the provider that held the accounts can be required to confirm the figure.

Since April 2024, the flexibility to hold more than one ISA of the same type in a tax year¹⁵ means the APS can also be split. A survivor with a large allowance could place part with one provider and part with another, or keep their existing ISA relationships and add the APS alongside them. Partial transfers of current-year subscriptions are also allowed¹⁶, which gives room to rearrange without losing shelter.

Not every provider accepts APS payments

The APS is a permission in the ISA regulations, not an obligation on providers to accept the business. Providers decide whether to offer APS subscriptions on their accounts, and some do not. An additional permitted subscription cannot be made to a Junior ISA in any circumstances², and beyond that, individual firms set their own commercial positions.

One firm has withdrawn the facility outright. SBIUK announced that from 10 March 2025 it would no longer offer the APS facility for its 1, 2, 3 or 5 year ISAs, so surviving spouses or civil partners cannot subscribe an APS allowance with SBIUK and may transfer their ISA to an alternative provider²⁵. A withdrawal like this does not extinguish the allowance: it means the money has to go elsewhere.

For a survivor, the practical steps are to ask any prospective provider, before opening an account, whether it accepts APS subscriptions, which ISA types it accepts them into, and whether it accepts APS transfers of investments as well as cash. A provider that accepts cash APS but not investment APS will not suit a survivor planning to move the actual shares or funds. Where the original provider no longer offers the facility, the 5DFB process for subscribing with a different provider is the route to use⁴.

How to make a claim

The process is administrative rather than a formal claim to HMRC. The steps, in order:

1. Obtain the death certificate and confirm the date of death is on or after 3 December 2014⁴.
2. Ask the provider or providers that held the deceased's ISAs for the value of the accounts at the date of death, and at closure if the death was on or after 6 April 2018. Regulation 5DFC obliges the provider to supply these details in specified circumstances⁴.
3. Decide the route: cash, inherited investments, or a mix, and note the different deadlines that apply¹.
4. Choose the receiving provider, whether the original one or a different one, and check that it accepts APS subscriptions of the type you want⁴.
5. Open or nominate the receiving ISA account. The account manager will need your national insurance information before you can subscribe¹².
6. Make the subscription within the permitted period, keeping records of the amounts and dates.

If the estate is still in administration, keep evidence of its progress, because the 180-day clock after completion of administration may extend the cash window beyond three years⁵. Where investments are being moved, the distribution date from the estate starts the 180-day window, so the transfer to the receiving provider needs to be arranged promptly¹.

What protects the money once it is paid in

Once an APS subscription is made, the money sits inside the normal ISA framework and enjoys the same protections as any other ISA money. The tax shelter is the same: income and gains within the ISA are free of UK income tax and capital gains tax on the same terms as ordinary ISA holdings, and the rules on what breaks that shelter, covered on when an ISA subscription breaks the rules, apply to APS money as they do to any other.

The value of the deceased's ISAs themselves is part of their estate for inheritance tax. NS&I's own account terms give a typical example of what happens to savings on death: "If the account holder (or last surviving account holder of a joint account) dies, we won't be able to accept any more deposits into the account. The balance will become part of the account holder's estate"²⁶. The same principle applies to ISA balances: they pass under the estate and are taxed as part of it, and the APS does not change that. HMRC's inheritance tax notes confirm that values left at the date of death are aggregated with the deceased's estate for inheritance tax purposes in the relevant circumstances²⁷, and where tax is payable on an estate, instalment arrangements exist for some assets²⁸. The APS is a going-forward allowance for the survivor, not an inheritance tax relief.

If a provider fails, money held in an ISA is covered by the Financial Services Compensation Scheme on the same terms as non-ISA money with that provider, and the FCA's compensation rules set out who is eligible to claim²⁹. The how your ISA is protected page covers the limits in detail. If something goes wrong with the APS process itself, a delayed transfer or a provider that mishandles the subscription, the complaint route is the provider first and then the Financial Ombudsman Service, as described on complaining about an ISA provider.