APS ISA Help

silversand

Hi,

My dad died earlier this year and I was tasked with sorting out his finances on behalf of mum - it's been a horrendous job as he had paperwork going back god knows how long to accounts that didn't exist so it's been...interesting, working out what is still current!

It's taken me ages to get my head around the APS allowance that mum has inherited, but I thought I'd just about grasped the basics. However I have now reached the point of acting on that and my head is just going to explode so rather than read even more I thought it would just be easier (and more reassuring) to ask here.

My understanding -
it's the allowance mum has inherited not the actual ISA
The money goes into a special APS ISA, but once there it behaves the same as a normal ISA and is mum's to transfer out or otherwise do what she wishes with?
Theoretically an account could be closed and that money then put in an APS ISA?

My questions -
He has ISAs all over the place. What is the best way to deal with this - do I open an APS ISA with each provider (assuming they offer one, as I know not all do) or is it better to open one APS ISA with one provider and then use that for all of them, and if so how do I decide which provider? (So far I know he has ISAs with Skipton, Coventry and Santander. I'm pretty sure there is also Britannia and Yorkshire BS. There was Nationwide but I closed that without thinking as there was only about £35 in it. Might be more, I'm still uncovering the mess!)

What I'd really like to do is just open an APS ISA with each provider, and then decide what to do with each individually (as presumably I can then transfer more than one APS ISA into a "regular" ISA?) but is that a bad idea? (And I was looking at one of the forms I've been sent and it keeps going on about "remember you can only transfer your APS ISA once" - I don't understand what that means, transfer from/to where? Will that then count as me transferring more than once if I've got APS ISAs all over the place?)

I'm just scared of cocking it all up, especially as it's not my money and mum is relying on me not to make a mess of it!

eskbanker

silversand said:

The money goes into a special APS ISA, but once there it behaves the same as a normal ISA and is mum's to transfer out or otherwise do what she wishes with?

Yes, although I suspect that the best way to look at it is from the perspective that there isn't really such a thing as 'an APS ISA' as such, i.e. there are ISAs which accept APS contributions but to all intents and purposes they're just standard ISAs, even if providers choose to make an essentially arbitrary distinction.

silversand said:

Theoretically an account could be closed and that money then put in an APS ISA?

I don't understand this question, in terms of which account could theoretically be closed?  All of your father's ISAs will be closed, if those are the accounts you refer to, but there's no choice in the matter.

silversand said:

He has ISAs all over the place. What is the best way to deal with this - do I open an APS ISA with each provider (assuming they offer one, as I know not all do) or is it better to open one APS ISA with one provider and then use that for all of them, and if so how do I decide which provider?

[...]

What I'd really like to do is just open an APS ISA with each provider, and then decide what to do with each individually (as presumably I can then transfer more than one APS ISA into a "regular" ISA?) but is that a bad idea?

To the best of my knowledge she can open multiple ISAs for her APSes, but on what basis are you favouring that over just one?  Is there any benefit in deferring a decision about what to do with the money ultimately?

silversand said:

And I was looking at one of the forms I've been sent and it keeps going on about "remember you can only transfer your APS ISA once" - I don't understand what that means, transfer from/to where? Will that then count as me transferring more than once if I've got APS ISAs all over the place?

I don't understand that either, but more context may help - are you able to share an image of the form or link to it if available online?

isasmurf

eskbanker said:

silversand said:

And I was looking at one of the forms I've been sent and it keeps going on about "remember you can only transfer your APS ISA once" - I don't understand what that means, transfer from/to where? Will that then count as me transferring more than once if I've got APS ISAs all over the place?

I don't understand that either, but more context may help - are you able to share an image of the form or link to it if available online?

This means that once you've chosen an ISA provider to use the additional permitted subscriptions and that provider has received details of the inherited ISA allowance being transferred from the existing provider, all the inherited allowance can only be used at that new provider. You can't then transfer any unused inherited allowance from the new provider to a third provider at any future point in time.

eskbanker

isasmurf said:

eskbanker said:

silversand said:

And I was looking at one of the forms I've been sent and it keeps going on about "remember you can only transfer your APS ISA once" - I don't understand what that means, transfer from/to where? Will that then count as me transferring more than once if I've got APS ISAs all over the place?

I don't understand that either, but more context may help - are you able to share an image of the form or link to it if available online?

This means that once you've chosen an ISA provider to use the additional permitted subscriptions and that provider has received details of the inherited ISA allowance being transferred from the existing provider, all the inherited allowance can only be used at that new provider. You can't then transfer any unused inherited allowance from the new provider to a third provider at any future point in time.

What you say makes sense, but if that's the issue being referred to then IMHO the quoted wording ought not to refer to 'transferring' an 'ISA', but should say something like 'if you only use some of your APS allowance, you can't retain the rest of it for later contributions at another provider'!

xylophone

Have you seen

https://www.gov.uk/individual-savings-accounts/inheriting-an-isa-from-your-spouse-civil-partner

it wouldn't matter even if all the money in your late father's ISA accounts had been left to somebody else  - your mother would still have the right to the additional allowance.

(So far I know he has ISAs with Skipton, Coventry and Santander. I'm pretty sure there is also Britannia and Yorkshire BS. There was Nationwide but I closed that without thinking as there was only about £35 in it. Might be more, I'm still uncovering the mess!)

I would suggest that before you do anything at all about an APS ISA, you establish the exact situation concerning these accounts.

With regard to Britannia

https://www.co-operativebank.co.uk/products/savings/help-and-support/britannia-guides/

Once you have done this, perhaps it would be most convenient to open an APS ISA with one provider for the whole amount available?

Example

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

Cjohns05

I am in a similar situation with my mother who needs to find a suitable cash ISA.
I have heard that some banks/bs only accept APS if there is an ISA already open at their institution, is that generally correct?
Can the APS go in to an existing ISA wrapper or does it have to be separate?
The suggestion on the one provider is valid but there is the £85k per institution limit to consider.

masonic

Cjohns05 said:

I am in a similar situation with my mother who needs to find a suitable cash ISA.
I have heard that some banks/bs only accept APS if there is an ISA already open at their institution, is that generally correct?
Can the APS go in to an existing ISA wrapper or does it have to be separate?
The suggestion on the one provider is valid but there is the £85k per institution limit to consider.

Providers are permitted to make such a restriction, but I don't think it is generally the case. If there is a specific APS ISA product, then it will probably be a separate account, but this is irrelevant when considering the FSCS limit. If the total held with the institution is above the FSCS limit, then this can be sorted out in short order via ISA transfer(s).

Rusty190

Would an APS ISA held with one bank or building society, having more than £85K balance, come under the "temporary high balance" umbrella of the FSCS? (assuming the depositor doesn't leave it sitting there for years).

eskbanker

Rusty190 said:

Would an APS ISA held with one bank or building society, having more than £85K balance, come under the "temporary high balance" umbrella of the FSCS? (assuming the depositor doesn't leave it sitting there for years).

One of the FSCS THB scenarios is inheritance, so it should be protected above £85K for six months from receipt of funds.

mezereum

Hi .. I've recently dealt with my husband's Estate and decided it was easiest to transfer his ISAs with various banks into ISAs in my name using the APS appropriate for each one. A bit of hassle but it's done. However, when I considered adding my personal allowance for '25-'26 into the National Savings ISA (opened with APS), I was told I could not do that as it would 'take me over the limit' .. there was only just over £1000 in it so I queried what they meant. They more or less said 'once an APS ISA, always an APS ISA  and I can't add to it, and if I ever want to transfer it again, it will have to be to a provider who accepts APS ISAs! If that is true, it means really the money never becomes mine to do what I like with eg in a year's time to 'consolidate' ISAs so less complicated for my family when I die. Have I been misinformed?  

eskbanker

mezereum said:

They more or less said 'once an APS ISA, always an APS ISA  and I can't add to it, and if I ever want to transfer it again, it will have to be to a provider who accepts APS ISAs! 

It does indeed sound like you were misinformed but what were their actual words and were they put into writing (employees of any financial institution are fallible....)?