ISA Guide · 2026/27
Inherited ISA Allowance (APS) 2026/27: How to Keep a Spouse's ISA Tax-Free
When an ISA holder dies, their surviving spouse or civil partner can claim a one-off Additional Permitted Subscription (APS) -- an extra ISA allowance equal to the value of the deceased's ISA, on top of their own annual allowance. It is one of the most valuable but least understood ISA rules, and missing the claim window means losing the tax-free wrapper permanently.
Why APS Exists
Before April 2015, when an ISA holder died, their ISA lost its tax-free status immediately -- any income or growth after death became taxable, and the surviving spouse had no special allowance to re-shelter the money. This penalised couples who had built up substantial ISA savings over many years, effectively taxing money that had already been saved tax-efficiently.
APS was introduced to fix this. It gives the surviving spouse or civil partner an additional one-off ISA allowance equal to the value of the deceased's ISA, so the family's ISA savings can, in effect, be kept tax-free within the household rather than being taxed on the survivor going forward.
Worked Example
Sarah's husband dies with a stocks and shares ISA worth £60,000 and a cash ISA worth £15,000, both with the same provider. Sarah is entitled to two APS allowances from that provider totalling £75,000 -- separate from her own annual ISA allowance.
In the same tax year, Sarah can subscribe up to £75,000 using her APS allowances, and can also use her full £20,000 annual ISA allowance -- meaning up to £95,000 can go into ISAs tax-free that year, all in her own name.
If her husband had held a third ISA with a different provider worth £10,000, Sarah would get a separate APS allowance of £10,000 from that provider too, which she could use with that provider or transfer elsewhere.
How to Claim APS: Step by Step
- Contact the deceased's ISA provider(s) and inform them of the death -- they will confirm the ISA value and issue an APS confirmation (often called a "certificate" or "APS reference").
- Decide which provider you want to use for the APS subscription -- the original provider, or a new one if you transfer the allowance.
- Complete the provider's APS application form, providing the death certificate and APS confirmation reference.
- Choose whether to subscribe cash, or (where offered) transfer investments in specie without selling them.
- Make the subscription within the time limit -- normally three years from death, or 180 days after estate administration completes if later.
Key APS Facts at a Glance (2026/27)
- Who can claim
- Surviving spouse / civil partner only
- Allowance amount
- Value of deceased's ISA at death (or closure, provider-dependent)
- Separate from annual allowance?
- Yes, fully additional to £20,000 ISA allowance
- Time limit
- 3 years from death, or 180 days after estate administration if later
- Multiple ISAs
- Separate APS allowance per provider
- In-specie transfer
- Available with some providers for stocks & shares ISAs