ASP/Spousal ISAs

Aviemore

I understand that it is possible under HMRC ISA regulations to maintain a deceased spouse's ISAs in a continuing account that keeps the tax free status of the holdings for up to three years after the date of death. This can be with the same or a different provider as part of the Additional Permitted Subscriptions limit for inherited ISAs. In my case, the current provider doesn't offer APS, so will only close the account or transfer the Cash ISA funds out, but, as far as I can see, there isn't a single ISA provider that accepts transfers in, so a transfer appears impossible. I think that certain investment funds will accept APS transfers, but in the current economic climate I'm not keen on converting a cash ISA to a stocks & shares ISA. Are there any providers that will accept transfers in of Cash APS ISAs?

dunstonh

but in the current economic climate I'm not keen on converting a cash ISA to a stocks & shares ISA.

Ironically, the current climate is the best time.   Waiting for it to go back up is counterintuitive.

eskbanker

Aviemore said:

In my case, the current provider doesn't offer APS, so will only close the account or transfer the Cash ISA funds out, but, as far as I can see, there isn't a single ISA provider that accepts transfers in, so a transfer appears impossible.

Transfers only apply between ISAs held by the same person - in the scenario where an ISA holder dies, that ISA is closed and the spouse receives the APS in the form of an extra allowance to use at any ISA provider who supports them.  This isn't an ISA transfer as such though....

https://www.gov.uk/guidance/manage-additional-permitted-subscriptions-into-an-isa

Marmaduke123

I found there are few cash ISA providers who will accept APS subscriptions.

In my case I opened a Legacy Cash ISA with the Skipton, and they explained what I had to do and provided the necessary form for them to obtain  certification of the APS amount from my deceased husband's cash ISA provider.

I then closed his account (needed probate for this), and the money was sent to my bank account. When I received confirmation from the Skipton of the APS amount I was able to pay it into the Legacy Cash ISA. I've subsequently transferred it to a better paying account with another provider, as it's now just another standard cash ISA.

It took me a while to get my head around the process, hope this helps.

xylophone

See https://techzone.abrdn.com/public/investment/Practical-guide-App-for-ISAAPS#:~:text=The Additional Permitted Subscription (APS,the time of their death.

There is now an additional ISA allowance available following the death of a spouse or civil partner. The Additional Permitted Subscription (APS) was introduced to allow a widow(er) to continue to benefit from tax free income and growth on an amount equal to the value of any ISA their deceased spouse/ civil partner held at the time of their death.

It's not the deceased’s ISA assets which are inherited but an additional ISA allowance equal to the value of the deceased’s ISA. This additional allowance is separate to, and independent of, the £20,000 annual ISA allowance.

The late Mrs Brown could have left all the cash in her ISA (s) to her son Tom but this would not prevent her widower Derek from claiming an APS.

https://www.gov.uk/guidance/manage-additional-permitted-subscriptions-into-an-isa