The Additional Permitted Subscription (APS) allows a husband, wife, or civil partner to inherit a tax-free allowance up to the value of their partner's ISAs, on top of their usual £20,000 limit.

For those who have lost a spouse or civil partner, understanding the financial options available can be a practical help during a difficult time.

Even if this doesn’t apply to you right now, it’s worth knowing about, especially if you or your partner have significant savings in ISAs. Here’s what the APS rule means, who can use it, and how it works in practice.

What is the ISA Additional Permitted Subscription (APS)

The APS lets you keep the tax-free benefits of your loved one's ISA savings by allowing you to pay in up to the value of their ISA holdings, on top of your own annual ISA allowance.

That's the value of their ISAs - not the allowance they haven't used up. So, if your partner had £50,000 in their ISA when they died, you could then invest £50,000 into an ISA of your own, tax-free, on top of your £20,000 allowance for that year. A total of £70,000 for the year.

The APS allowance is applicable even if the money in the deceased's ISA is left to someone else.

The legal partner can use this new allowance for a year after their loved one's death. The time limit for claims is three years after death or 180 days after the estate is fully administered.

Alex King, accountant, financial coach, and founder of the personal finance platform, Generation Money, told NimbleFins: “This is a really valuable opportunity to hold onto more of your wealth tax-free, but many people aren’t aware of it until it’s too late to make the most of it."

What happens to an ISA when you die?

An ISA carries on earning interest after the holder has died and it becomes a "continuing ISA".

This status ends either three years after death, when the estate has been distributed, or when the ISA is closed - whichever comes first.

During this time, no new contributions can be made, but any interest generated is free of income tax and capital gains tax.

If you are married, your partner can invest up to the value of your ISA tax-free using an 'Additional Permitted Subscription' (APS), plus their own standard allowance.

For the 2026/27 tax year, it is important to note how this interacts with new contribution limits. For example, if a wife died with £80,000 in her ISA, her husband could still invest £100,000 tax-free that year. However, under rules announced in the Autumn Budget 2025 and taking effect from April 2027, his own £20,000 allowance will be subject to a £12,000 limit on Cash ISA contributions, with any remaining allowance available for other ISA types (gov.uk, Autumn Budget 2025).

Crucially, the £80,000 inherited APS is not subject to this £12,000 cash cap, meaning he could effectively shield the entire £92,000 in cash if he chooses to use his APS for a Cash ISA.

Read more: NimbleFins Best Savings Accounts Guide

Can I use my partner’s ISA allowance after they die?

The Additional Permitted Subscription (APS) is only available to a spouse or civil partner of the person who has died. This is a specific legal relationship. Long-term partners or cohabiting couples who weren’t married or in a civil partnership do not qualify, even if they lived together for many years.

However, the deceased must have been living with their spouse or civil partner at the date of the death. They must not have been separated under a court order, Deed of Separation, or in circumstances where the marriage or partnership had broken down, according to Gov.uk.

According to HMRC and Gov.uk guidance, you’re not eligible for APS if you were not living together as spouses or civil partners at the time of death: "That is, not separated under a court order, under a deed of separation, or in circumstances where the marriage or civil partnership has broken down."

How does APS work?

To apply for the APS, the deceased's partner must first register the death with their loved one's ISA provider.

The partner should then apply for the APS with the ISA provider where the money will eventually end up. So say, for example, the husband and wife use different ISA providers and the deceased's partner wants to add the extra funds into their current ISA. They would need to apply through their current provider who will sort the claim with their spouse's provider.

Mr King added: “Keep in mind, the additional ISA allowance doesn’t automatically transfer. You’ll need to apply through your ISA provider.

“Also, remember the APS can be used as a lump sum or in instalments, and it doesn’t have to go into the same type of ISA your partner held. So if they had a Cash ISA but you prefer a Stocks & Shares ISA, you’ve got flexibility... Being aware of this rule and how it works can help you hold onto more of your family’s wealth at a time when every bit of stability helps.”

From the 2027/28 tax year, under-65s will be subject to a £12,000 annual limit on new Cash ISA contributions, with any remaining allowance available for other ISA types such as Stocks and Shares ISAs. The APS allowance is separate from this limit and is not subject to the £12,000 cash cap. This means a surviving spouse or civil partner may be able to contribute inherited APS funds into a Cash ISA beyond the standard annual limit, depending on provider terms and HMRC implementation. Cash ISAs and Stocks and Shares ISAs serve different purposes and suit different time horizons, objectives, and attitudes to risk.

Note, the deceased's partner will need to prove they were living with them when they died. (If they were in a care home and still legally married this is still fine).

It’s up to the ISA provider to be satisfied the couple were still together. If there’s any doubt, they may refuse the APS allowance to avoid falling foul of HMRC rules.

To assess eligibility, the ISA provider may ask for:

• Proof of address (e.g. council tax, utility bills)

• A letter of explanation

• Possibly a statutory declaration confirming you were still together (emotionally and practically) and/or

• a note from a solicitor or executor

This article is general information only and does not constitute financial advice. If you are unsure which ISA type is appropriate for your circumstances, consider seeking independent financial advice.

Read more on ISAs:

• Cash ISAs vs Stocks & Shares ISAs: Which is best?

• Still have money to invest after the ISA deadline? Here are the best rates

• Average Household Savings & Wealth UK

• New ISA rules - the good... and bad changes explained