Scope: UK-wide. ISA inheritance rules apply across England, Wales, Scotland, and Northern Ireland. Content reflects confirmed rules following the November 2025 Budget and January 2026 updates.
TL;DR
- ISAs do not vanish when someone dies.
- A surviving spouse or civil partner receives an Additional Permitted Subscription (APS).
- APS is a one-off extra ISA allowance, equal to the value of the deceased’s ISA(s).
- APS is in addition to the normal annual ISA allowance.
- Used correctly, APS preserves decades of tax-free growth.
What Is Additional Permitted Subscription (APS)?
Additional Permitted Subscription (APS) is a special ISA inheritance rule that allows a surviving spouse or civil partner to keep the deceased’s ISA savings tax-free.
Instead of losing the ISA wrapper:
- You receive an extra ISA allowance
- Equal to the value of the deceased’s ISAs at death (or when settled)
- Which you can use to shelter cash or investments again
This is one of the most valuable but least understood estate planning benefits in the UK.
Who Qualifies for APS?
You qualify if you were:
- Married to, or in a civil partnership with, the deceased
- Living together at the time of death (separation can complicate claims)
APS does not apply to:
- Children
- Unmarried partners
- Other beneficiaries
Advisor insight:
APS is a spousal tax privilege, not a general inheritance rule.
How Much APS Do You Get?
Your APS allowance equals:
- The total value of all ISAs held by the deceased
There is no upper limit.
Example
- Deceased held £180,000 across Cash and Stocks & Shares ISAs
- Surviving spouse receives £180,000 APS
- Plus their normal £20,000 annual ISA allowance
Total shelter available that year: £200,000
Timing Rules That Catch People Out
APS is not unlimited in time.
Standard Deadlines
- Cash ISAs: APS must usually be used within 3 years of death
- Stocks & Shares ISAs: Often 180 days after estate completion
Exact deadlines depend on the provider — but missing them can permanently destroy the tax advantage.
Cash ISA vs Investment ISA APS
APS can be used in two ways:
Cash APS
- Use APS to deposit cash into a new or existing Cash ISA
- Suitable if the estate is paid out in cash
In-Specie (Investment) APS
- Transfer investments directly into an ISA
- Avoids selling assets and triggering capital gains
Not all providers support in-specie transfers — choosing the wrong provider can force a taxable sale.
A Crucial 2026 Context: Why APS Matters More Now
With the Cash ISA allowance cut for under-65s from April 2027, APS has become even more valuable.
APS:
- Bypasses future allowance cuts
- Protects historic tax-free shelter
- Cannot be recreated once lost
In practice, APS often matters more than a decade of annual allowances.
Common APS Mistakes (And How to Avoid Them)
Withdrawing ISA funds too early
Once ISA money is withdrawn incorrectly, the tax-free status can be lost.
Missing provider deadlines
APS is time-limited and provider-specific.
Using the wrong ISA type
Cash-only providers may block in-specie investment transfers.
Assuming APS is automatic
It is not — you must actively apply.
Step-by-Step: How to Use APS Correctly
- Obtain the death certificate
- Ask the ISA provider for an APS valuation letter
- Choose a provider that supports your intended ISA type
- Open the APS ISA account
- Transfer or contribute funds within the deadline
Advisor note:
Always confirm APS procedures before withdrawing any money.
Tax Position During Estate Administration
While the estate is being settled:
- ISA tax protection ends at death
- Interest or gains earned before APS is used may be taxable
- APS restores the tax shelter from the point of subscription
This is why delays quietly erode value.
Is APS Financially Worth Using?
- Small ISAs (£10k–£20k): Still worth doing
- Medium ISAs (£50k–£150k): Very valuable
- Large ISAs (£150k+): One of the biggest tax-saving tools available
Main risk: not knowing APS exists until it is too late.
People Also Ask (PAA) & FAQs
What is Additional Permitted Subscription?
APS is a one-off extra ISA allowance for a surviving spouse, equal to the value of the deceased’s ISAs.
Does APS replace my annual ISA allowance?
No. APS is on top of your normal annual allowance.
Can APS be used for Cash and Stocks & Shares ISAs?
Yes, depending on provider capability and whether investments are transferred in-specie.
Is APS affected by the 2027 ISA allowance cut?
No. APS sits outside annual allowance limits.
What happens if I miss the APS deadline?
The allowance is lost permanently and cannot be reinstated.
Do I need a solicitor to use APS?
No, but complex estates may benefit from professional guidance.
APS is one of the most powerful ISA rules available, but it works best when combined with wider planning. To decide where inherited cash should actually be held, our cash ISA vs savings account for retirees guide explains when tax-free wrappers materially outperform taxable accounts. To understand why APS has become even more valuable, the ISA allowance cut explained April 2027 sets out how future limits no longer apply to inherited ISAs. Once those rules are clear, our review of the best Cash ISAs for estate planning helps ensure inherited funds are not left earning poor default rates. Together, these guides protect both the money and the tax-free status.