Claiming the ISA Allowance a Widow Inherits

If your husband or wife has died and they held ISAs, you are entitled to an extra ISA allowance of your own, on top of the one everyone gets each year. It is called the additional permitted subscription, or APS. It is one of the few genuinely good pieces of news buried in the paperwork of bereavement, and it is also one of the most commonly missed, because nobody writes to tell you it is there. Your provider will not chase you about it. You have to ask.

In plain terms, the additional permitted subscription lets a surviving spouse or civil partner keep the same amount of money inside a tax shelter that the person who died had built up. If your late husband held money in a cash ISA or a stocks and shares ISA, you gain an inherited ISA allowance of the same value, which you can use to pay money into an ISA in your own name. It exists so that a widow or widower does not quietly lose the tax-free status their partner spent years accumulating.

Two things trip people up, and this page deals with both. The allowance is not the money itself — the money passes under the will or the intestacy rules like everything else, while the APS is a separate right to pay in an equivalent sum from any source you like. And it does not last forever: you generally have three years from the date of death to use it. Below is how much it is worth, exactly how long you have, and what each provider asks to see before it will open the wrapper.

What the additional permitted subscription actually is

Before this allowance existed, an ISA lost its tax-free status the moment the holder died, and the surviving spouse had no way to rebuild the shelter beyond their own annual limit. A couple who had each filled an ISA for years could see half of that tax protection vanish overnight, for no better reason than which of them died first. The APS was created to close that gap.

What you receive is an allowance, not automatically a pot of money. It gives you the right to subscribe an extra amount into an ISA in your own name, equal to what your partner held. You can meet that in one of two ways. You can pay in cash up to the allowance, funded from anywhere — the inheritance itself, your own savings, the sale of something. Or, where the same provider held the ISA, you can move the actual investments straight across into your own ISA without selling them first, which is known as an in specie transfer and matters if the market is down and you would rather not sell at a loss.

The allowance belongs to you as the surviving spouse or civil partner. It is not shared out among other beneficiaries, and it does not depend on you inheriting the ISA money. Even if your partner left their ISA to someone else entirely, you still receive the allowance — though, as covered below, you would then have to fund it yourself.

How much the allowance is worth

The allowance is worth the value of the ISAs held by the person who died. If they held ISAs with more than one provider, each firm issues its own additional permitted subscription for the amount it held, and you add them together. You are then free to use the whole combined allowance with a single new provider if that provider accepts APS money, which is often simpler than running several small wrappers.

There is a helpful detail in how the value is fixed. An ISA no longer loses its tax advantages on the day the holder dies. Instead it becomes what the rules call a continuing account of a deceased investor, and it keeps its tax-free status until the earliest of the estate being settled, the account being closed, or three years passing. Because of that, many providers can base your allowance on the higher of two figures: the value at the date of death, or the value when the account is finally closed. If the investments have risen in the meantime, that can make the allowance larger than the date-of-death snapshot would suggest, so it is worth asking your late partner's provider which basis it uses rather than assuming the earlier figure.

How long you have to use it

The deadlines are the part people most often get wrong, usually by leaving it too late while the rest of the estate is being sorted out. The windows differ depending on how you fund the allowance.

• Paying in cash: you generally have three years from the date of death, or, if it is later, 180 days after the administration of the estate is complete. In most cases the three-year window is the one that matters.
• Moving the actual investments across (in specie): a shorter window applies — broadly 180 days from the point the estate administration is finished. Miss it and you can still use the allowance in cash within the longer window, but you lose the option to carry the holdings over without selling.

The practical advice is the same either way: do not wait for anyone to contact you, because they will not. Apply to the provider you want to use and set the process going. If the estate is complicated and administration will run for a long time, note that the clock on the in specie route only starts when administration ends, but do not rely on that as a reason to delay the paperwork you can already start.

The allowance is not the same as the money

This is the single most confusing part, and getting it clear early saves a lot of frustration. The APS is a right to subscribe. The ISA money is a separate asset of the estate that passes according to the will, or the intestacy rules if there is no will.

When a husband or wife leaves everything to their spouse, the two things line up neatly: you inherit the ISA money and you also hold an allowance the same size, so you simply move the money into an ISA in your own name and nothing is lost. But the two can come apart. If the ISA was left to children, or split between several people, you still receive the full allowance as the surviving spouse — but you would have to fund it from your own resources, because the ISA money itself is going elsewhere. In that situation the allowance is only useful if you have other money to put in.

Where a will has left assets in a way the family would rather change — sending the ISA to the survivor so the allowance can actually be used, for instance — it is sometimes possible to redirect an inheritance by agreement. Our guide on redirecting an inheritance within two years of the death explains when a deed of variation can do that and what all the beneficiaries have to agree to.

One thing worth saying plainly, because it sits behind the whole subject. The additional permitted subscription protects the tax efficiency of your savings, which is valuable, but it does nothing to replace the income or the pension the person provided while they were alive. That gap is usually far larger than any tax saving, and it is the reason many couples hold life cover written to pay out to the survivor. If you are reading this and realising there is no cover in place for the person left behind, you can get life insurance quotes and have an FCA-authorised broker price it against your actual circumstances.

The paperwork each provider wants

You do not need a grant of probate simply to claim the allowance, which surprises people who assume everything waits on the grant. What a provider asks for is more modest, though the exact form of it varies from firm to firm.

Expect to be asked for the death certificate, or an official copy of it; a valuation of the ISAs at the date of death, which the provider that held your partner's ISA can supply; and evidence of your relationship, usually the marriage or civil partnership certificate, together with proof of your own identity. Some firms have a dedicated additional permitted subscription application. Others fold it into a general bereavement pack, and you have to make sure the APS box is actually ticked rather than assuming it is handled automatically.

Getting at the underlying ISA money, as opposed to claiming the allowance, is a separate question and may need probate or, in Scotland, confirmation if the sum is above the provider's own release threshold. The ISA is rarely the only account to deal with, either. Alongside it there are usually current accounts, subscriptions and digital services to close, and our guide to bereavement admin, assets and contracts works through the wider list, including modern app-only bank accounts with no branch to walk into. Keep copies of everything you send, because you may need to prove later what you provided and when.

Who can claim, and who cannot

The additional permitted subscription is limited to a surviving spouse or civil partner. That limit is strict, and it catches people out, so it is worth being blunt about it.

A cohabiting partner does not qualify, no matter how long the couple lived together or how plainly they shared their lives. The allowance depends on a marriage or civil partnership, and nothing else stands in for it. There is also a separation rule: if you were separated from your husband or wife under a court order or a formal deed of separation at the date of death, or in circumstances that made a permanent separation likely, you generally do not qualify even though you were still legally married.

A divorced former spouse does not qualify at all, because the marriage has ended. What a divorced partner can and cannot claim after a death is a tangled area in its own right, and we set it out separately in what a divorced partner can claim when an ex-husband dies. It is also worth remembering that other bodies can look back at an estate for money owed the other way — a benefits overpayment, for example — and our note on when the DWP wants benefits back after a death explains how that works, so the ISA allowance is understood as one entry in a fuller picture rather than in isolation.

Scotland and Northern Ireland

The ISA rules, including the additional permitted subscription and its deadlines, are set by HMRC and apply across the whole of the United Kingdom. A widow in Aberdeen or Belfast has exactly the same allowance, worth the same amount, with the same three-year window, as one in Cardiff or Leeds. That part does not change with the border.

What differs is the machinery for releasing the underlying money and administering the estate. In Scotland the equivalent of a grant of probate is called confirmation, obtained through the sheriff court, and banks and investment providers apply their own limits before they will pay out larger sums without it. We cover how that works in how Scottish banks and building societies release money after a death. In Northern Ireland the grant process differs again from England and Wales. None of these differences touch the APS allowance itself, which remains the same everywhere; they only affect how quickly you can get at the money you may want to use to fund it. You can read HMRC's own summary of the rules on inheriting an ISA in the government guidance on inheriting an ISA from a spouse or civil partner.

Frequently asked questions

What is the additional permitted subscription?

It is an extra ISA allowance for a surviving husband, wife or civil partner, on top of their own annual allowance. It is worth the value of the ISAs held by the person who died, so the survivor can keep the same amount of money inside a tax shelter in their own name. It is an allowance rather than a transfer of the money itself, which passes separately under the will or the intestacy rules.

How long do I have to use it?

Generally three years from the date of death, or 180 days after the administration of the estate is complete if that is later. Transfers of the actual investments across from the same provider have a shorter window, broadly 180 days from the end of administration. Apply to the provider you want to use rather than waiting for anyone to contact you about it, because nobody will.

Can I use it with a different provider?

Yes. You are not tied to the firm that held your husband's or wife's ISA, although not every provider accepts these subscriptions and the forms differ. You will usually need the death certificate, the ISA valuation at the date of death, and confirmation of your marital status. It is often simplest to combine allowances from several providers into one new ISA with a firm that accepts APS money.