Inheriting a spouse’s ISA allowance

When a spouse or civil partner dies, the survivor can pay an extra amount into ISAs equal to the value of the deceased’s ISAs, on top of their own £20,000 allowance for 2026 to 2027. This is the additional permitted subscription in regulation 5DDA of the Individual Savings Account Regulations 1998. Cash must go in within three years of the death or, if later, 180 days after the estate’s administration is complete; inherited ISA investments moved across without selling them must go in within 180 days of passing to the survivor.

Who can use a deceased spouse’s ISA allowance?

Regulation 5DDA applies where an ISA investor died on or after 3 December 2014 leaving a surviving spouse or civil partner. GOV.UK confirms you cannot inherit the allowance of someone who died before that date. HMRC’s guidance for ISA managers adds these conditions:

• you and the deceased were living together at the date of death, within the meaning of section 1011 of the Income Tax Act 2007;
• you were not separated under a court order or deed of separation, or in circumstances where the marriage or civil partnership had broken down;
• it does not matter whether you inherit the ISA itself. The allowance is available even if the ISA assets go to someone else under the will;
• you can use it even if you are not UK resident.

Unmarried partners do not qualify, however long they lived together. The extra allowance cannot be paid into, or come from, a Junior ISA.

How much extra can you pay in?

For deaths on or after 6 April 2018 the ISA becomes a continuing account of a deceased investor and stays tax free until the executor closes it, the administration is completed, or the provider closes it three years and one day after the death. The additional permitted subscription is the higher of:

• the value of the deceased’s ISAs at the date of death; and
• their value immediately before they ceased to be continuing accounts.

Some detail from HMRC’s guidance:

• Several ISAs with one manager. The limit is the combined value, using one valuation point for all of them. You cannot mix date of death values for some accounts with closure values for others.
• ISAs with different managers. You have a separate limit with each manager, and you may use the date of death value with one and the closure value with another.
• Lifetime ISA. The value includes any government bonus accrued but not yet paid.
• Locking in. Once you subscribe using the date of death value, you cannot later switch to a higher closure value.
• Junior ISAs held by the deceased are excluded from the calculation.

Where can the extra subscription be paid?

You can pay it to the manager that held the deceased’s ISA or to another manager that agrees to accept it. Managers are not obliged to accept additional permitted subscriptions. It can go into a cash, stocks and shares or innovative finance ISA, old or new, or into a Lifetime ISA if you are eligible. A Lifetime ISA payment still counts towards the £4,000 Lifetime ISA limit and is not possible if you are 50 or over or not UK resident.

The key restriction is that it is one manager per limit. Once you make an additional permitted subscription with a manager, any further payments up to that limit must be made with the same manager, and an unused balance cannot be taken to another one. If you choose a new manager, it sends the deceased’s manager a notice, and the deceased’s manager must confirm the value within 30 calendar days and undertake not to accept subscriptions itself.

The subscription is treated as a previous year subscription for every ISA apart from the Lifetime ISA. It does not reduce your own £20,000 for the year, and you can later transfer the money between ISAs under the normal rules.

Can you transfer the investments instead of paying cash?

Yes, if the conditions in regulation 5DDA(2)(e) are met. Inherited non cash ISA assets can be subscribed in specie, without being sold, if:

• they were held in the deceased’s ISA when the manager was told of the death;
• title stayed with the deceased’s manager or its nominee throughout;
• you subscribe them to the deceased’s manager. In specie is not available if you use a different manager.

The value of the assets when you subscribe them counts against your limit. If they have grown during the administration and you have not locked in the date of death value, the closure value may let you move them all. Alternatively you can pay cash, from the estate or from your own money, up to the limit.

What are the deadlines?

Type of subscription	Time limit
Cash	Within three years of the death, or within 180 days of the administration of the estate being completed, whichever is later
Inherited ISA investments in specie	Within 180 days of the assets being distributed to you. An interim and a final distribution each get their own 180 day window

For in specie subscriptions HMRC treats the clock as starting when the manager is formally told the assets belong to the survivor, and says it will query cases showing avoidance or manipulation. A manager can accept a subscription provisionally while paperwork is outstanding, but if the information and declarations do not arrive within 30 calendar days, the amount must be removed or will count towards your normal annual allowance.

What declarations will the manager ask for?

Before the first subscription you give the deceased’s full name, address at death, dates of birth and death, National Insurance number if known, the date of the marriage or civil partnership, and the deceased’s ISA manager. You declare that you are the surviving spouse or civil partner, that you were living together at the death, that the subscription is made under regulation 5DDA, and that it is within the time limit. The last two declarations are repeated each time you pay in. An attorney or deputy can make them on your behalf.

How does this work in practice?

Illustration only. David dies on 10 June 2026 with a £60,000 cash ISA and a £40,000 stocks and shares ISA, both with one manager. He and Elaine were living together. The estate takes 15 months to complete, and when the ISAs stop being continuing accounts they are worth £104,000.

• Elaine’s limit with that manager is £104,000, the higher of £100,000 and £104,000, provided she has not already subscribed using the £100,000 figure.
• She inherits the shares and has them subscribed in specie to the same manager within 180 days of them passing to her. Suppose they are worth £42,000 then.
• She can pay the remaining £62,000 in cash to the same manager by the later of 10 June 2029 or 180 days after the estate is complete.
• Separately, she can still pay £20,000 of new money into her own ISAs for 2026 to 2027.

What about inheritance tax and other taxes?

The extra allowance only affects future tax on the money. GOV.UK states that ISA investments still form part of the deceased’s estate for inheritance tax, even though income and gains stay tax free while the account is a continuing account. Whether tax is due depends on who inherits; see the spouse exemption. Income arising on the estate’s other assets during administration is covered in estate income and gains in administration.

What mistakes do people make?

• Assuming the allowance is lost because the ISA was left to children. It is available whether or not you inherit the assets.
• Letting the three year deadline pass on a simple estate that was finished quickly. The 180 days after completion only helps if it ends later than three years.
• Paying part of the allowance to one manager and trying to use the rest elsewhere.
• Selling inherited shares and moving cash to a new manager, then expecting an in specie transfer. In specie only works with the deceased’s manager.
• Using the date of death value early when the account is likely to be worth more at closure.
• Assuming a separated spouse qualifies. The living together condition at the date of death must be met.

For the wider ISA rules see ISA tax rules, and for how cash subscriptions will be limited from 6 April 2027 see the cash ISA limit cut. Lifetime ISA points are covered in Lifetime ISA bonus and withdrawal charge.

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Related Accountapedia entries

• Do I pay UK tax on an inheritance from abroad
• Advance subscription agreements
• Bed and breakfasting, bed and ISA and bed and spouse
• Advance subscription agreements in the accounts
• Is a cash ISA worth it with the savings allowance

Sources

• legislation.gov.uk: SI 1998/1870, regulation 5DDA
• legislation.gov.uk: SI 1998/1870, regulation 5D
• GOV.UK: Manage additional permitted subscriptions into an isa
• GOV.UK: Individual savings accounts
• GOV.UK: How isas work

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.