Making additional permitted subscriptions
Under HMRC rules the APS can be made to any Isa manager of the survivor’s choosing, but it is up to the Isa manager whether they accept them.
You may find that you need to – or it is easier to – make the APS to the manager who held the deceased’s account, then transfer the Isa elsewhere if they are not the preferred manager.
Any subscriptions made under the APS rules are treated as previous year’s subscriptions, so it does not matter if the survivor has already paid into their existing stocks and shares Isa with one manager, they can still pay the APS into another stocks and shares Isa with a different manager (that is the one who held the deceased’s account) without breaking the “paying into more than one Isa of the same type in one year” rule.
Similarly there is no issue with opening a new Isa to receive the APS even if they have already opened a new Isa of the same type with a different manager in the same tax year.
The survivor can choose to use the APS to pay into a cash, stocks and shares, innovative finance or Lifetime Isa, or a combination of them, and they can be existing Isas or new ones set up to receive the APS.
The only restrictions apply to Lifetime Isa for which the survivor must be eligible.
This means they must be aged 18-39 if they are opening a new account, or under 50 if they already have a Lifetime Isa they want to pay the APS into.
The APS still counts towards the £4,000 Lifetime Isa limit and they can only pay in if they have not paid into another Lifetime Isa in the tax year.
Each APS limit must be used with one manager.
For example, if there was an available APS of £50,000 relating to an Isa, the deceased held with manager A, you could not use £30,000 with manager A for a stocks and shares ISA and £20,000 with manager B for a cash Isa.
You could however split the £50,000 between a stocks and shares Isa and a cash Isa both with manager A.
However, if the deceased held Isas with different managers, then the survivor will have a separate APS limit from each one.
So they could use the APS from manager A for a stocks and shares Isa with manager A, and the APS from manager B for a cash Isa with manager B.
In the rare event of the survivor entitled to the APS being a 16 or 17 year old, then they would only have the option of paying it in to an adult cash Isa, as it is not possible to make APS payments to Junior Isas.
