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Background: Heart failure is a common condition in older people with complex medical needs. A key factor in resilience after heart failure is the capacity to perform the instrumental activities of daily living (IADLs). Knowing the association between capacity to perform IADLs and entry into aged residential care will help health professionals plan interventions that will allow older people to remain independent longer.Methods: We analyzed the association between the capacity to perform eight IADLs and entry into ARC. Participants included New Zealanders aged ≥65 years with a diagnosis of heart failure, and who had an InterRAI 9.1 Home Care assessment between July 2012 and June 2018. A multivariable competing risks regression model for entry to ARC with death as the competing risks was used to establish sub-hazard ratios (SHR) for IADL capacity. Co-variates included demographic variables, co-morbidities, living arrangements, cognitive performance, depression, timed walk, alcohol use, smoking, activities of daily living, recent hospitalization and history of falls.Results: There were 13,220 participants with heart failure who were followed for a median 1.69 (0.70–3.17) years. There were 3,177 (24.0%) participants who entered aged residential care and 5,714 (43.2%) who died without having first entered residential care. Overall capacity to perform specific IADLs was “very poor” for housework (85.5%), shopping (68.0%), stairs (61.7%), meal preparation (53.0%), and transportation (52.2%). In the multivariable model, compared to adequate capacity (the reference) poorer capacity for managing finance, managing medications, meal preparation and transport were all associated with increased risk of entering aged residential care, with SHR from 1.05 to 1.18. Overall, the IADL capacity explained ~10% of the risk of entering aged residential care.Conclusion: Capacity to perform IADL is a key factor in maintaining resilience in older people with heart failure. Capacity to manage finances, transport and medications, prepare meals, and transport oneself with minimal supervision could reduce the risk of entry into aged residential care. Developing early interventions and support for people with poor capacity to perform their IADL may help reduce admission into aged residential care.