What happens to an ISA when someone dies? APS explained

Correct as of 26 September 2026. The ISA and tax rules on this page were last checked against gov.uk on this date. Figures are for the 2026/27 tax year unless a different year is stated.

When someone dies, their ISA does not lose its tax-free status straight away, and a surviving spouse or civil partner may be able to pay an extra amount into an ISA of their own on top of the normal allowance. This guide sets out what gov.uk says happens to an ISA on death, how the extra allowance (the additional permitted subscription, or APS) works, and where Inheritance Tax comes in. It is general information for a difficult time, not advice on your estate.

What happens to the ISA itself

gov.uk explains that after the holder's death the ISA continues for a period, and no new payments can be made into it. It ends when the first of these happens:

the executor closes it,
the administration of the estate is completed, or
3 years and 1 day after the death, when the provider closes it.

Up to that point there is no Income Tax or Capital Gains Tax to pay on the ISA. For a stocks and shares ISA, the provider can sell the investments and pay the proceeds to the estate, or transfer the investments to a surviving spouse's or civil partner's ISA if they use the same provider.

Inheritance Tax

ISAs are free of Income Tax and Capital Gains Tax, but gov.uk is clear that ISA investments form part of the estate for Inheritance Tax purposes. Whether any Inheritance Tax is due depends on the whole estate and who inherits it. That is a question for the executor, and often for a solicitor or probate specialist.

The extra allowance for a surviving spouse or civil partner

If your spouse or civil partner died on or after 3 December 2014, you can inherit their ISA allowance: an additional permitted subscription that sits on top of your own £20,000 allowance for 2026/27. HMRC's guidance for ISA managers sets the conditions: you must have been living together at the date of death, and not separated under a court order, a deed of separation, or in circumstances where the marriage or civil partnership had broken down.

How much you can pay in

For deaths on or after 6 April 2018, the extra allowance is the higher of the value of the ISA at the date of death and its value when it stops being a continuing account of a deceased investor. For deaths between 3 December 2014 and the day before 6 April 2018, it is the value at the date of death. You can use it in one payment or several, as long as the total does not go above the limit.

Time limits

Cash payments: within 3 years of the date of death or, if later, 180 days after the administration of the estate is complete.
Transferring the investments themselves (an "in specie" payment): within 180 days of the assets passing to you.

Which provider

The payment can be made to the provider that held your late spouse's or civil partner's ISA, or to another provider that agrees to accept it. Providers are not obliged to accept additional permitted subscriptions, so it is worth asking before you decide where to open or use an ISA.

Other points from HMRC's guidance

The extra allowance can be paid into a cash ISA or a stocks and shares ISA. It can also go into a Lifetime ISA, where it counts towards the Lifetime ISA's own £4,000 yearly limit, and the usual Lifetime ISA rules (including the 25% withdrawal charge) apply.
It cannot be paid into, or come from, a Junior ISA.

Lifetime ISAs and Junior ISAs on death

gov.uk says there is no withdrawal charge when a Lifetime ISA holder dies. For Junior ISAs, gov.uk has a separate page on what happens if the child is terminally ill or dies.

Practical steps

Tell each ISA provider about the death. They will explain their process and what documents they need.
If you are the surviving spouse or civil partner, ask the provider about the additional permitted subscription and its deadline for your case.
Keep the ISA valuation at the date of death, and the date the estate's administration completes, as these set the amount and the time limit.
For questions about the estate and Inheritance Tax, speak to the executor and, if needed, a solicitor or a regulated financial adviser.

For the current ISA limits, see ISA rules at a glance. Our guide to ISA tax implications covers other situations where tax can arise, and How many ISAs can I have? explains the rules on holding several accounts.

Sources

This article is general information based on gov.uk and HMRC guidance. It is not legal, tax or financial advice. Rules on estates depend on individual circumstances.