Understanding the Additional Permitted Subscription (APS) allowance
The Additional Permitted Subscription (APS) allows you to make contributions to an ISA in addition to your annual ISA allowance, £15,240 in the 2016/17 tax year, up to the value of cash and investments held in your deceased spouse or civil partners ISAs. The APS becomes available to you following their death, and you generally have 3 years to use the allowance from the date of death, or if you inherit assets within 180 days of the ownership passing to you.
Find key information about the APS allowance below.
What is the APS allowance?
- Your APS allowance will be the value of your spouse’s ISA at their date of death.
- You can apply for your APS allowance to the ISA provider that holds your deceased spouse or partner’s ISA or with a provider of your choice. If you’d like to use your APS allowance with a different ISA provider you’ll need to transfer your APS allowance.
- You can have a separate APS allowances with each ISA provider that your spouse or civil partner held ISAs with.
- The APS allowance is independent of the assets held in the ISA. If the ISA assets are passed to another member of the family under the will, you can still apply for the APS and you can fund it using cash that either you already hold or which you inherit.
- If investments are held in the ISAs and you inherit them, you can transfer the investments to an ISA in your own name and use them to subscribe to your APS allowance.
Who can have an APS allowance?
- The spouse or civil partner of an ISA holder who died on or since 3 December 2014.
- You needed to be married or in a civil partnership with the ISA holder and living together at the time of death. You can’t use an APS allowance if you were separated under a court order or Deed of Separation or separated under 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.
When is the APS allowance available?
- From your spouse or civil partner’s date of death.
- If investments were held in one or more ISAs, then you’ll need to get a probate valuation, which can take a couple of weeks.
- You can apply for your APS allowance from the date of death but there are time limits on how long you have to use it.
- If the administration of the estate takes longer than three years from the date of death, you’re allowed to make cash subscriptions to your APS allowance within 180 days of completion of the administration of the estate.
How can you use your APS allowance?
- You can use your APS allowance in either a cash ISA or an investment ISA or a combination of both with the same ISA provider.
- If spouse or civil partner holds a cash ISA, you can open an ISA account with the same provider and either transfer over the money (if you inherit it) or use your own money to subscribe to the APS allowance.
- If your spouse or civil partner’s ISA held 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" to your own ISA - see below for more information on transferring.
- 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 ISA provider then open an ISA and fund it once the APS allowance transfer is complete.
Transferring to another provider - checklist
If you’re transferring your APS allowance to another provider you’ll need to consider the following things:
- Make sure they’ll allow you to use it.
- You can hold APS allowances with more than one provider if your spouse held ISAs with multiple providers.
- Your APS allowance is in addition to your annual ISA allowance, so you can use both allowances with the same ISA provider or different providers.
- If you’ve used some of your APS allowance already, you won’t be able to transfer any remaining APS allowance to another provider, you’ll need to use your remaining APS allowance with your existing provider.
- Once a transfer is initiated, the ISA providers have a total of 60 days (30 days each) to exchange information.
- Once you’ve transferred an APS allowance you can’t transfer it again.
- As soon as you make a payment towards your APS allowance with one provider you can’t transfer the allowance held with that provider again. However any subscriptions made to your APS allowance can then be transferred to another ISA provider under the normal ISA transfer rules.
Key things to think about
Here are the main things you’ll need to think about when considering applying for your APS allowance.
- Did your spouse or civil partner have ISAs and if so do you want to keep some or all of your money in these tax-efficient accounts?
- If your spouse or civil partner had an investment ISA, do you want to keep the money invested? If you’ve inherited these investments, do you want to transfer them to an ISA in your name? If so, you’ll need an ISA with the same provider to use your APS allowance. However, once any subscriptions have been made to your APS Allowance you can then transfer your ISA balance to another ISA provider under the normal ISA transfer rules.
- Are you happy to use the same type of ISA and do you want to stay with the same provider or transfer to another ISA provider? Don’t forget you can move ISAs to a new provider at any time and consolidate a number of ISAs with one provider to make it easier to manage them. Remember though, if you’ve used some of your APS allowance already, you won’t be able to transfer any of that remaining APS allowance to another provider. You’ll need to continue using the remainder of that APS allowance with your existing provider.
Remember that tax rules can change and whether an ISA will benefit you will depend 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 is not for everyone. If you’re unsure whether a cash ISA or investment ISA is suitable for you, please seek independent financial and tax advice.
APS allowances and Barclays ISAs
If your spouse or civil partner had ISAs with Barclays and you want to use the APS allowance, here’s what you need to do.
- Tell us about the death of your spouse or civil partner by calling 0800 231 4905* or 0141 352 3915*. At this point we may ask if there’s a surviving spouse or partner, particularly if the account is a Barclays Stockbrokers investment ISA
- Apply for the APS allowance using the necessary forms and decide how you want to use it – Barclays cash ISA or Barclays Stockbrokers investment ISA. If you don’t already have an ISA account, you’ll need to open an Investment ISA. If your spouse or civil partner held an investment ISA, you inherited the investments in that account and you want to transfer them as they are, you’ll need to have an ISA account with the same provider. If you’re funding your APS allowance with cash, then you’re free to choose any ISA provider
- Once you’ve applied for the APS allowance and its value is confirmed, you can start to use it – through either a cash ISA or an investment ISA or both. You can use the allowance in one go or through separate lump sums