Can you open up multiple inheritance ISAs with multiple banks

benchesh

Hi, I'm trying to help my Dad sort out my late Mum's estate. She had multiple cash ISAs with multiple banks, and we want to get all of those transferred over to my Dad. Each bank she has account with with offer a way to open up an inheritance ISA and get the money transferred over. However, after speaking with at least one representative from every bank, including HMRC and a financial ombudsman, we have doubts as to whether opening up multiple inheritance ISA accounts is legal. We have yet to speak to someone who is 100% certain in their understandings of ISA laws, hence why I'm writing a post on this forum. We obviously want to do everything by the book, but nobody seems to know what the book is. I'm frankly quite baffled at just how confusing this process has been so far.

 To put it simply, some people have told us ALL of her ISAs across ALL banks must be transferred into a single inheritance ISA with a single bank. We'd not like to do it this way if we can avoid it, as some banks don't seem to allow the APS allowance to transfer over to a different one. We'd much rather just open up new accounts in my Dad's name, get everything transferred over to him, and do a standard ISA transfer afterwards.

Furthermore, does all of this need to happen in the same tax year? My Mum had a fixed cash ISA with one bank which doesn't mature until this time next year. We'd like to leave that account alone until it matures, and then set up another inheritance ISA next year.

She had no stocks & shares ISAs, only cash ISAs.

Any help at all would be appreciated, this is causing us a lot of stress.

sausage_time

See this thread:  https://forums.moneysavingexpert.com/discussion/6531017/inherited-isa-allowance-for-multiple-isas and in particular this https://www.gov.uk/guidance/manage-additional-permitted-subscriptions-into-an-isa (link provided by @eskbanker on that thread).

benchesh

Thank you for your reply. Neither page specifically answer my questions though. If we can avoid the extra difficulty in coordinating the APS transfer from bank to bank to get everything into a single account, that’s what we’d want to do.

xylophone

https://www.skipton.co.uk/savings/additional-permitted-subscriptions#:~:text=If your partner held several,into one single APS allowance.

What if your spouse or civil partner had more than one ISA?

If your partner held several ISAs with different ISA providers, you are entitled to a separate APS allowance with each of the ISA providers. Alternatively, you can transfer multiple APS allowances to one ISA provider who will combine them into one single APS allowance.

Newly_retired

As I recall, you have three years grace to set up the APS ISA transfer, so the fixed rate one can be left to maturity.
Lloyds bank’s bereavement team were well informed, but at some point I had to go into a branch to fill in a form. The chap there was extremely kind and helpful and made it his priority to find out what an APS was, but clearly he had not come across it before!

benchesh

xylophone said:

What if your spouse or civil partner had more than one ISA?

If your partner held several ISAs with different ISA providers, you are entitled to a separate APS allowance with each of the ISA providers. Alternatively, you can transfer multiple APS allowances to one ISA provider who will combine them into one single APS allowance.

Thanks for this. This implies you can open up an ISA with each provider (and each provider would have a separate APS). It's still not quite as definitive an answer as I'm looking for, but it's one of the better ones.

Newly_retired said:

As I recall, you have three years grace to set up the APS ISA transfer, so the fixed rate one can be left to maturity.
Lloyds bank’s bereavement team were well informed, but at some point I had to go into a branch to fill in a form. The chap there was extremely kind and helpful and made it his priority to find out what an APS was, but clearly he had not come across it before!

Thanks for this. I'm hoping this also means the APS for that account can be transferred in a different year to all of the other ones.

fuzzzzy

We did this a few years ago in 2020 during the covid pandemic and I remember it was a nightmare trying to sort out as we got so much conflicting and erroneous advice from banks and BSs.

I might be wrong but I seem to remember being under the impression that you could only have 1 inheritance ISA open at any one time. We did it all through Skipton BS in the end. As we closed each of my deceased father's ISA accounts and sorted the APS allowance for it we could pay the equivalent amount into the Skipton Inheritance ISA for my mother. As the Inheritance ISA interest rate was not the best we would at the same time be opening up new ISAs to do partial transfers out until all the money had been filtered through the inheritance ISA. It actually ended up being relatively straight forward once we had got our heads around it. We had trouble with one particular bank (I forget which) not sending through the APS allowance information in a timely manner, but just left the Inheritance ISA open with a minimal amount in it until we could get this last one sorted. We got it all sorted within one tax year but don't really see why it would be any different if one account was not sorted until the next tax year. I seem to remember Skipton BS also confirming if we closed the Inheritance ISA prematurely before all the APS allowance had been used we would still be able to open another one.

Also regarding your comment,

...... as some banks don't seem to allow the APS allowance to transfer over to a different one. 

I'm pretty sure they have to, although I could be wrong. We certainly had a number of APS allowances to transfer and they all went through in the end. For us, dealing with just one inheritance ISA seemed the easiest way to proceed.

Edited:

According to Barclays

"Not all ISA providers allow you to use your APS allowance with them but they must allow you to transfer your APS allowance to another ISA provider of your choice. Once you’ve applied to use an APS allowance with an ISA provider you must use all of it with that provider."

newatc

Amazing that we can't get a clear picture on this. 
I would hope that the Skipton information (quoted by Xylophone) is correct and that is what I'm assuming as it seems most sensible (though when dealing with UK money laws, that can't be guaranteed).