The little-known ISA tip that lets you go over your tax-free allowance | Personal Finance | Finance

There is a tip to increase the amount of tax-free ISA cash that is sometimes hidden on providers’ websites, according to an expert. Called the additional permitted subscription (or APS for short), this benefit gives you a one-off extra ISA allowance following the death of your spouse or civil partner.

However, this is not offered by all providers, so make sure you thoroughly check whether you are entitled to receive it. If you are eligible and fall into the criteria, you are able to use the money from your deceased partner’s ISA to open one in your own name. Importantly, it does not count towards the current year’s £20,000 allowance but comes on top. You have three years from the date of death to use it, says Daily Mail savings expert Sylvia Morris.

There is some leeway, and if administering the estate is to take longer than this, you have up to an additional 180 days after it is complete.

It is vital that you receive permission to prove you are entitled to this allowance from each of your late partner’s ISA providers.

Ask your chosen provider to organise the transfer directly into an ISA in your name.

Under ISA rules, you can open your new ISA with either the existing provider or move it to a new one.

If you choose to open your new ISA using the same provider, it is down to them whether or not they will accept the APS – and it is common for them not to.

Many of the big banks do accept the APS, however, including Barclays, Halifax, Lloyds, NatWest, Santander and Virgin Money. If with HSBC, they only do if you have a current account with them. With these banks, their easy-access rates are generally below 1.5%

National Savings & Investments accepts the additional allowance paid into its Direct ISA, paying 3.5%.

The providers that don’t accept the APS include Marcus, Shawbrook Bank, Paragon, Charter Savings Bank, Kent Reliance, Leeds BS, Close Brothers, Synergy, Ford Money, Hodge Bank, Secure Trust, Vida Savings and United Trust Bank.

The Chancellor of the Exchequer Rachel Reeves was reportedly considering the controversial idea of cutting the annual allowance for cash ISAs by up to £16,000 a year, in a bid to encourage people to put money into stocks and shares.

This means it is vital to make the most of cash ISAs now while you still can.