Naz Financial

A Personal Financial Blog from Naz Miller

Can I Inherit an ISA?

If your spouse or civil partner dies, in most cases you’ll be able to inherit their ISA savings through what’s known as an Additional Permitted Subscription (APS). It’s also called an inherited ISA allowance.

Any ISA funds inherited as an APS retain their tax-free status. They count as a one-off ISA allowance, granted to the surviving spouse (or civil partner) for that tax year only.

There’s useful information on the Government’s website at: https://www.gov.uk/individual-savings-accounts/inheriting-an-isa-from-your-spouse-civil-partner

Some Rules For Inheriting ISAs

  • You must have been living together when your partner died. If separated, the APS doesn’t apply.
  • If the spouse or civil partner of the deceased is 16 or 17 years old, the APS must be converted into an ‘adult’ ISA product and cannot be made into a ‘Junior ISA’ product.
  • The ISA in question must not be a ‘Lifetime’ ISA.
  • You must apply for an APS within certain time limits. These are:
    • Within 180 days of beneficial ownership passing to the surviving spouse or civil partner for ‘in specie’ transfers
    • Within 3 years of death for cash subscriptions
    • If later than 3 years, within 180 days of the completion of the administration of the estate.

Claiming an Inherited ISA Can be Complex

If your partner leaves you an ISA in their will, and you’ve inherited it by being their next of kin, you must contact the ISA provider to tell them that you want to claim this ISA.

Before you can claim an APS, you’ll need to provide the ISA provider with:

  • The deceased’s full name.
  • Their permanent residential address at the date of death.
  • The deceased’s date of birth and date of death.
  • Their National Insurance number (if known).
  • The date that your marriage or civil partnership took place.
  • The identity of the account provider who managed the deceased’s ISA.

You’ll also be required to declare that you are the surviving spouse or partner of the deceased, and that you were living with them at the time of their death.

Claiming an additional permitted subscription while inheriting an ISA can be a complex process. I advise that you engage the services of a qualified financial adviser, or a solicitor handling the probate, with a proven track record in dealing with this kind of product, to help you make the right decisions.

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Naz Miller

I'm Naz and I'm a Financial Adviser. Prior to working in private practice, I spent 34 years working at Lloyds Bank in Cambridge and surrounding areas. My work has always focused on helping clients achieve their long-term financial objectives.

Glossary of Personal Financial Terms

AAA Rating

In short, AAA ratings (‘triple-A‘ ratings) are the highest credit rating available for an investment, such as a bond or company.

AAA ratings are issued to investment-grade debt that has a high level of creditworthiness with the strongest capacity to repay investors.

Similarly, the AA+ rating is issued by S&P (Standard and Poor) and is similar to the Aa1 rating issued by Moody’s. It comes with very low credit risk and indicates the issuer has a strong capacity to repay.