Transfer of an ISA allowance to surviving spouse/civil partner

From 6 April 2015 when an ISA investor dies, it has been possible for a surviving spouse to make additional subscriptions above the normal ISA allowance (£15,240 in 2015/16).

The new allowance known as an “additional permitted subscription” (APS) is available where the deceased dies on or after 3 December 2014 and is limited to the value of the deceased’s ISA as at the date of death.

Key points for ISA’s held on the Old Mutual Wealth Platform:

  • As above, only available if the date of death is on or after 3 December 2014.
  • APS is limited to the value as at date of death.
  • If surviving spouse is an existing ISA client of ours, APS will go into the existing ISA.
  • APS can be transferred to us from (and from us to) another ISA manager assuming the APS has not been used with them (or us) in part.
  • The deceased may have held a number of ISA’s with Old Mutual Wealth (or another provider). Accounts held with the same legal entity will be aggregated to give one “Additional permitted subscription” amount.
  • APS made by cash lump sum can be made from 6 April 2015 but must be within 3 years of date of death (or 180 days after the administration of the estate is complete, if later). Deaths between 3 December 2014 and 5 April 2015 are considered to have occurred on 6 April for the purposes of the 3 year deadline.  
  • Inherited assets can be transferred in specie within 180 days of the beneficial ownership passing to the surviving spouse.
  • Inherited assets can be transferred in specie to the surviving spouse with the same ISA manager but is limited to the units held when we were notified of the death and limited to the value at date of death.
  • Any inherited assets that exceed the APS allowance will be paid to the surviving spouse who could then make a personal contribution to the ISA using their remaining ISA allowance.
  • There are some further points in the Guidance notes however as they are optional for the ISA manager we have chosen not to offer.


Surviving spouse inherits the ISA assets:

Joe dies leaving ISA assets valued at £100,000 on the date of death and leaves his estate in full to his wife, Marie.

Marie opens an account with the same provider and asks for the units held by Joe to be transferred into her new account without disposing of them within the 180 day timescale. At this time the units have increased in value to £109,000 so £9,000 is sent to her nominated bank account following the transfer.

Marie then makes a personal contribution of £9,000 using her £15,240 allowance (2015/16).

Surviving spouse doesn’t inherit the ISA assets:

Joe dies leaving ISA assets valued at £100,000 on the date of death and stipulates in his Will that his son John should receive this money.

Although Joe’s wife Marie hasn’t inherited the £100,000 she does still benefit from an APS of £100,000 which she can use over the next 3 years (or 180 days after the administration of the estate is complete, if later) as and when she has capital to invest. Marie still receives her own ISA allowance each year during this time.  

Although Joe held the ISA with Old Mutual Wealth Marie doesn’t have to hold her ISA with the same provider to utilise this additional allowance but would have to apply to transfer it before making use of it.

Surviving spouse would like to use APS with a different ISA manager:

Joe dies leaving ISA assets valued at £100,000 on the date of death and leaves his estate in full to his wife, Marie.

Marie chooses not to transfer the inherited assets into an ISA in her name and cashes in the units held within Joe’s account. Marie still has an APS of £100,000 to use within 3 years of the date of his death.

After a year Marie considers opening an ISA with £50,000 and would like to use the APS with her bank who offer a Stocks and Shares ISA. She approaches them and tells them that she would like to transfer her APS from Old Mutual Wealth to them so that she can invest the £50,000.

Her bank asks her to complete an APS transfer authority and they then send it across to Old Mutual Wealth requesting the transfer of the allowance. On receipt of the form Old Mutual Wealth send confirmation of the value of the APS (value of Joe’s ISA at date of death) to the bank.

On receipt of the confirmation from Old Mutual Wealth Marie’s bank are now in the position to accept the APS. 

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