Is anybody aware whether the Additional Permitted Subscription is lost where, specifically, non-cash ISAs are not inherited.
My understanding is that the APS applies whoever receives the ISA (cash or non-cash) the issue then is whether the spouse has alternative assets of their own to utilise it.
I appreciate where non-cash ISAs are not inherited they cannot be used to make in-specie transfers (makes sense).
The following statement appears on Lexis Nexis.
• where the deceased’s ISA(s) comprise non-cash assets, the additional ISA allowance only applies if the deceased’s ISA(s) are distributed to the surviving spouse or civil partner under the terms of the Will, although this includes an inheritance under a Will trust. If non-cash ISA assets are inherited by a third party, then the additional ISA allowance will not be available to the survivor. In the case of a cash ISA, the spouse will be entitled to the additional allowance even if the assets have been left to someone else, or have been used to meet expenses from the estate
My firm is an ISA Manager and has been so for many years. The APS provisions apply to both Cash and Stocks and Shares ISAs and an APS can be made with either the assets that continue to be managed as a ring-fenced ISA portfolio in the estate, or with cash to the value of the APS.
If a Stocks and Shares ISA is distributed to a different beneficiary (whether a Trust or a named legatee) so that these assets are not available to be transferred, the APS can be made with cash provided that sufficient cash assets are available to the surviving spouse or civil partner.
There is a time limit of the later of three years or 180 days after the administration of the estate has been completed. See How to manage additional permitted subscriptions - GOV.UK for more detail. HMRC have been understanding in a recent case where fraud prevented a transfer of the APS within this time frame, but the presumption should be that they will stick to the relevant time limit under all but extraordinary circumstances.