APS ISA allowance calculation.

Rusty190

I've been trying since May to open an APS (Inherited) ISA, with NS and I.
I've been given a figure for my allowance which I cannot make head or tail of.
Am I correct in thinking that my allowance should be the total sum my lovely late husband had invested in all ISA accounts at the time of his death?
Would this include interest accrued up to date of death or not?
Is there anything else here that I haven't taken into account which would explain the difference in my calculation and NS and I's?
Thank you.

Keep_pedalling

It would include everything held in his ISA at the time this would include any interest that remained in the account but not any interest that was paid into another account.

The main thing to consider is whether it is actually worth putting this inheritance into a cash ISA which are not good value. Yes you don’t pay any tax on an ISA but (assuming you are a basic rate tax payer) you  don’t p any tax on interest outside an ISA unless you earn more than £1000 pa interest and the rates outside ISAs are higher so even if your interest is high enough to pay tax you still earn more after tax. For instance the ISA you are looking at pays 0.9% but NS&I pays 1.2% for a non-ISA account  and you can do better elsewhere.

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Rusty190

Thank you for your response @Keep_pedalling.

For me personally,I want to keep this money in an ISA for now until I decide what I'm doing long term.

I know this particular ISA interest rate is rubbish (as are most APS ISA rates, to be fair) but the plan is to get it in then move some/all of it into a better ISA account.

I do not want to get into a pickle with tax/HMRC if I can help it.

Dealing with this issue and probate, life insurance plus the 1001 other things which bereavement brings has been bad enough.
HMRC would just about finish me off.

Unfortunately for me, the 2 banks my husband had ISA's with, do not offer APS so I had no choice but to go down this route as leaving it where it was wasn't an option.

I had thought, the "Government's Bank" would be the best first move, as they would know what they were doing. Silly me!

But, it really should not be this difficult or take this long to sort out.

Keep_pedalling

Rusty190 said:

Thank you for your response @Keep_pedalling.

For me personally,I want to keep this money in an ISA for now until I decide what I'm doing long term.

I know this particular ISA interest rate is rubbish (as are most APS ISA rates, to be fair) but the plan is to get it in then move some/all of it into a better ISA account.

I do not want to get into a pickle with tax/HMRC if I can help it.

Dealing with this issue and probate, life insurance plus the 1001 other things which bereavement brings has been bad enough.
HMRC would just about finish me off.

Unfortunately for me, the 2 banks my husband had ISA's with, do not offer APS so I had no choice but to go down this route as leaving it where it was wasn't an option.

I had thought, the "Government's Bank" would be the best first move, as they would know what they were doing. Silly me!

But, it really should not be this difficult or take this long to sort out.

Although song organisations have these so called inheritance ISAS you can put the additional allowance into any ISA. There will just be some additional paperwork required to claim this allowance. 

https://www.skipton.co.uk/savings/savings-hub/additional-permitted-subscriptions

Marmaduke123

I found that many ISA providers specifically exclude APS funding in the small print.

Personally, I used the Skipton Legacy Isa. You open it first and fill in the forms they provide re your late husband's ISA(s). They contact the providers to get the APS amount. I knew what it was as I had already closed the ISA (probate needed) and received the funds with interest up to the date of closure into my bank account. When the Skipton confirmed the APS amount I could pay it onto the new ISA.

The process is different to the normal one of transferring an ISA. I found both Skipton and my late husband's ISA provider efficient and timely. I had some difficulty understanding in what order to do things, but my local Skipton branch were helpful with this.