From 6 April 2015, spouses and civil partners* of ISA holders who have died since 3 December 2014 will be able to inherit an additional ISA allowance. The value of the inherited ISA allowance, also referred to as an additional permitted subscription (APS) allowance, is equivalent to the value of funds that the ISA holder held in their ISAs when they died. A spouse or civil partner could therefore inherit allowances with a number of ISA providers reflecting where the deceased held their ISAs.
The inherited ISA allowance is in addition to the normal annual ISA allowance that savers and/or investors can continue to use.
The additional ISA allowance can be used for up to 3 years from the date of death or 180 days after the completion of the administration of the estate, if longer**. Money can be paid in as a lump sum or in instalments (if allowed for by the provider).
Please note: the rules only apply to the transfer of an allowance and not the actual funds held within an ISA. The existing processes in place to move money held within the deceased’s ISA into the name of a beneficiary will still be followed.