When a loved one passes away it's a difficult and stressful time. The Additional Permitted Subscription (APS) is designed to make things a little easier for grieving partners. It's an allowance that means the surviving spouse or civil partner can make extra contributions to their ISA.
So, they can get the tax benefits of the ISA allowance their partner has built up over the years - even if they left their actual ISA savings to someone else.
Tax benefits will depend on your circumstances and may change in the future. The information on this page is based on our current understanding of tax rules.
Who’s eligible for an APS?
You could be eligible for an APS, if you’re a spouse or civil partner who isn’t separated or estranged from your partner at the time of their death. The ISA must’ve been in the name of the person who passed away. The APS is only available for deaths that happened on or after 3 December 2014. If your partner died before this date, you won’t be eligible for an APS.
How does APS work?
On 5 April 2018, the rules changed so if the value of the ISA has gone down since your partner died, you can use the value of the ISA as it was when they passed away. If the value has gone up since death, you can use the value of the ISA as it was at the point where it stopped being the continuing account of the deceased. If you need to know more, there are examples on the Government’s website.
If the surviving spouse or civil partner inherits their partner’s ISA investments and transfers those into their own ISA and the value at transfer is less than the available APS, a top up payment can be made by the surviving spouse or civil partner.
What are the benefits of APS?
You can make an additional tax-efficient contribution to your own ISA. And, because the APS is based on the value of your partner’s ISA, this extra contribution could be a significant amount of money.
The APS doesn’t depend on whether you leave your ISA to your spouse or civil partner. So, if you leave the value of your ISA to your children, your spouse still gets the APS to add to their own.
Can I use an APS for any type of ISA?
APS can be used for Cash ISAs, Stocks and Shares ISAs, and Innovative Finance ISAs and can also be made on a Lifetime ISA if the investor is a UK resident. The APS doesn't apply to Junior ISAs.
If the person who passed away held more than one ISA with different providers, there’s a separate APS allowance for each one. If they had a few ISAs in the same place, the provider issues only one APS which covers all those ISAs.
Are there any limitations to an APS?
- Eligibility: APS is only applicable to spouses or civil partners and the deceased partner needed to have an ISA at the time of their death.
- Time constraints: APS must be utilised within a specific timeframe. If the subscription is for cash, then the timeframe is three years from the date of death or three years after the administration of the estate is completed, whichever is later. When it’s a transfer of the actual asset, called ‘in specie’ transfers, the beneficial ownership can be passed on to the spouse or civil partner within 180 days.
- Amount: The APS allowance is based on the higher of the value of the deceased partner's ISAs at the time of death - or the value where it stopped being the continuing account of the deceased.
Does the APS affect your ISA allowance for the current tax year?
No, it offers an additional allowance on top of your regular ISA allowance, allowing you to make more tax-efficient savings.
