Inheriting an ISA: The Additional Permitted Subscription Explained (2026/27)

When someone dies, you might expect their ISA tax shelter to die with them. For spouses and civil partners it does not have to. A rule called the Additional Permitted Subscription (APS) lets the surviving partner inherit the value of the deceased's ISA as an extra allowance, on top of their own GBP 20,000. It is one of the most overlooked reliefs in UK personal finance.

What exactly is the APS?

The APS is an additional ISA allowance equal to the value of your late spouse's or civil partner's ISA. It is granted to the surviving spouse or civil partner only, not to children or other heirs.

• Your own ISA allowance for 2026/27 stays at GBP 20,000.
• On top of that, you get an APS equal to your partner's ISA value.
• The APS value is the higher of the ISA value at the date of death or the value when the ISA stops being a "continuing ISA".

So if your partner held GBP 80,000 in ISAs, you can shelter GBP 80,000 via the APS plus your own GBP 20,000, GBP 100,000 in total that year.

How do I use it?

You have two routes, depending on your provider:

• Cash subscription: you pay in your own cash, up to the APS value, into an ISA. The original assets can be sold and the proceeds used.
• In specie transfer: you move the deceased's actual investments straight into your ISA without selling, if the provider supports it. This is useful to avoid being out of the market.

You do not need to use the same provider, though it can be simpler. The APS is claimed by completing a form with the chosen ISA manager.

Worked example

Margaret's husband David dies holding GBP 60,000 across his stocks and shares ISAs. Margaret already plans to use her own GBP 20,000 allowance for 2026/27.

• Margaret claims an APS of GBP 60,000.
• She can subscribe up to GBP 60,000 to an ISA under the APS, in addition to her GBP 20,000 normal allowance.
• That is GBP 80,000 sheltered in the year, all tax free going forward.

If David's holdings rose to GBP 63,000 between his death and the transfer, Margaret's APS can be based on the higher value, so she could shelter GBP 63,000 under the APS.

Key points and deadlines

• Eligibility: only spouses and civil partners living together at the date of death qualify.
• Deadline: generally three years from the date of death, or 180 days after the estate administration is complete if that is later.
• Separate from IHT: spousal transfers are already free of Inheritance Tax, so the APS is purely about keeping the money inside the ISA wrapper.
• Provider rules vary: some allow in specie transfers, some only cash. Ask before assuming.
• The deceased's ISA can stay tax free as a "continuing account of a deceased investor" for up to three years while the estate is sorted.

The APS is easy to miss in the weeks after a bereavement, but missing it can mean GBP 60,000 or more drifting out of the tax-free wrapper unnecessarily. If you are an executor or surviving spouse, flag it early with the ISA provider.

To estimate the tax saved by keeping inherited savings inside an ISA, use the CalcHub dividend tax and savings calculators, and read the detailed APS and inherited ISA guidance on gov.uk.