Additional permitted subscriptions

iwant2asave

Hi there,

Please can any help clarify what to do in the below scenario to make use of ISA additional permitted subscription.

Deceased has 2 ISAs one stocks and shares ISA and one cash ISA each with different providers. 

I am aware of the pros and cons of ISAs but it is wanted to make use of additional permitted subscription and convert the 2 ISAs into one cash ISA for the surviving spouse.

In addition the surviving spouse already has existing ISA in their own name so possibly combine the APS ISAs with this too as well.  Thanks,

xylophone

See


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


Has the widow asked her existing ISA provider about opening an Inheritance (APS) ISA?

Example

https://www.coventrybuildingsociety.co.uk/member/product/savings/cash_isa/additional-allowance-isa.html

eskbanker

iwant2asave said:

I am aware of the pros and cons of ISAs but it is wanted to make use of additional permitted subscription and convert the 2 ISAs into one cash ISA for the surviving spouse.

Just to be clear, there's no conversion process as such - the deceased's ISAs are closed and the spouse is then allowed to make an equivalent subscription to one or more separate ISAs of any type, which may or may not involve the actual proceeds from the deceased's ISAs, i.e. these are effectively unrelated processes.

masonic

It might be easiest to use the APS where it currently resides and then transfer the resultant ISAs into a combined account wherever the surviving spouse wishes to hold it. If depends on whether the deceased's providers will accept the APS arising from the ISA they held for the deceased. It is not usually possible to use an APS in a top paying ISA, some providers won't accept APS and others have dedicated low rate products to receive APS, which should be transferred out to a better rate standard ISA as soon as possible.

iwant2asave

Thanks for the replies everyone.

So just to clarify.  Currently widow has their own cash ISA.  Deceased had one cash ISA and one stocks and shares ISA.

Would widow be able to end up with a single cash ISA in total.  Is this possible or not? (e.g. get a APS ISA for both of deceased ISA and then combine this with widows existing own cash ISA to have a single ISA in total from the 3 ISAs).

If this is possible then what are the steps please?

We have received forms from existing providers and seen the gov link above but I am not completely understanding how this would work in the scenario I mentioned so any further clarification would be appreciated.  Thanks,

masonic

It is possible, and can be done in a number of ways, depending on what the individual providers will allow, and the widow's preferences. You would need to find out from each provider whether they would allow you to use the APS with them or not. From there, you can probably come up with a plan.

xylophone

Does the widow's current ISA provider offer an APS ISA?

Marmaduke123

Not many cash ISA providers allow APS subscriptions. Among those which have dedicated products for this purpose are Skipton, Santander and Nationwide.

Steps:

Identify and open a suitable cash ISA in the widow's name.

Close the deceased's cash ISA and have the money paid into the widow's bank account. This may need probate if not already obtained.

When the receiving ISA provider informs the widow that they have received verification of the APS amount she can pay this sum into the new ISA.

After this, she can transfer the legacy ISA into a better paying account,  upon which it becomes simply a standard ISA. 

Then she can transfer her own ISA into the new standard ISA, having regard of course to the safe 85000 limit. 

I don't  have experience with a stocks and shares ISA, but I imagine the process will be similar, involving closure of the ISA and payment of the proceeds into the widow's bank account. Hopefully the bereavement department of the provider will advise.

xylophone

Yorkshire BS and Coventry BS offer APS.