ASP ISA

rizzo_the_rat

My father has passed away and he left 3 cash ISA's. One will convert that into an ASP ISA for my mum, but the other 2 do not offer that service. The one that will, will not accept any other ISA's to be transferred in. I have been looking around and can only seem to find Skipton as a cash ISA supplier that accept an ASP transfer in. All the others seem to be stocks and shares ISA's which I am not interested in. My concern is that the 2 remaining ISA's total over £85k in them and I don't want to have more than that in each ISA as it's not covered if the banks go bust.
Also, I have seen / heard that you can only have one ASP ISA at a time, but there is conflicting information.
Any advice or experience in this area would be appreciated?
Many Thanks

flaneurs_lobster

Think you mean APS, Additional Permitted Subscription. 

eskbanker

rizzo_the_rat said:

My father has passed away and he left 3 cash ISA's. One will convert that into an ASP ISA for my mum, but the other 2 do not offer that service. The one that will, will not accept any other ISA's to be transferred in. I have been looking around and can only seem to find Skipton as a cash ISA supplier that accept an ASP transfer in. All the others seem to be stocks and shares ISA's which I am not interested in. My concern is that the 2 remaining ISA's total over £85k in them and I don't want to have more than that in each ISA as it's not covered if the banks go bust.
Also, I have seen / heard that you can only have one ASP ISA at a time, but there is conflicting information.
Any advice or experience in this area would be appreciated?
Many Thanks

The guidance is a bit confusing across and between its different sections but my understanding is that your mother has three Additional Permitted Subscriptions, one for each of your father's ISAs, which can be used with three different ISA providers:

Where the deceased held ISAs with a number of different managers the surviving spouse or civil partner will have additional permitted subscription limits with each manager.

[...]

A surviving spouse or civil partner can make additional permitted subscriptions using sums they have inherited or other cash they have. They can make their additional permitted subscriptions to any combination of existing or new ISAs that they have.

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

APSes don't actually involve transfers as such, but enable a larger than usual contribution into an ISA, which can come from any source rather than just the old ISA, which simply sets the maximum value of the new subscription.

I don't have any detailed knowledge of exactly which providers do and don't accept APSes but would observe that once these extra subscriptions are made, the ISA contents aren't any different from standard ones, so can be transferred around in the normal way, immediately if desired.  In particular, there wouldn't be any issue with paying into S&S ISAs, leaving the money uninvested, and then promptly transferring away to standard cash ISAs as a normal ISA transfer, rather than this being specifically an APS transaction.  Likewise, such transfers can be used to rebalance to keep below £85K with each provider.

EdSwippet

rizzo_the_rat said:

... I have been looking around and can only seem to find Skipton as a cash ISA supplier that accept an ASP transfer in.

"Which?" publishes a table of possible candidates. It may be a touch out of date, but it's somewhere to start.

You're right that quite a few banks and building societies either won't do APS ISAs at all, or if they will, only where the deceased already held an ISA. Frustrating, but not insurmountable. Just hunt around. Very worthwhile doing.

As noted already upthread, an APS ISA is nothing more than an ordinary ISA that has an extra allowance, equal to the amount in the deceased's ISA(s). You have three years in which to use this allowance. It's perfectly fine if the money leaves the old ISAs first, and then goes into the APS ISA(s) as contributions.

The one thing to watch for is odd restrictions on how you fund this APS contribution. For example, some providers might restrict you to just one payment in, making it easy to lose part of the APS ISA additional allowance if you're not super-careful.

Finally, although not on the Which? list, IIRC Santander offers full APS ISAs. Their interest rates are unexciting, but again as mentioned upthread, once you have used your additional subscription into an APS ISA, you're left with a plain old ISA, like any other, and which you can then transfer to wherever you like (usual ISA transfer rules apply).

Rusty190

N S and I offer what is essentially an APS ISA - though they call it "A Direct ISA inherited allowance account" - snappy eh?! It currently offers 3% interest rate but once all monies in, it could then be split and partially transferred to a better paying couple of new cash ISA accounts paying better rates.  In my experience, they do move at a snails pace but it does get round the £85K issue. Good luck and sorry for your loss.

rizzo_the_rat

Thanks everyone for your helpful replies.