Numpty ISA question

annagain · 2 June 2012 at 9:06AM

I've got a few ISAs but this is the first time I've been in the position of having more than the allowance, so I'm not sure what to do with it!

I've had some inheritance, which we're planning to use to build an extension, but we haven't even started on planning etc yet so we won't need the money for 6 months to a year. I haven't used this year's allowance yet so thought an ISA would make sense.

However, for ease when I need to start dipping in, I'd like the money in one place, so is it possible to put more than the allowance in an ISA but only get the tax free interest on the £5640?

I'm guessing not as it would be too complicated to keep track of e.g if you withdraw funds, are they from the tax free chunk or the rest of it?

innovate · 2 June 2012 at 9:14AM

You can only ever put up to your annual allowance in new money into an ISA.

As you think you might need the money in the short term, the rest should perhaps go into one or more instant access accounts - - you want to make sure you do not have more than £85K in total in any financial institution.

As an aside - - getting plans drawn up by an architect, getting planning permission, obtaining quotes from builders, waiting for the building work to start etc can all easily take 12+ months. So you could probably put the majority of your money into a 12 months fixed term account, to get a tad better interest rates. Keep some money available though - the architect and the planning department will want their money sooner.

annagain · 2 June 2012 at 9:20AM

Thanks, thought as much.
And thanks for the buidling advice - I was thinking about putting some of it in a fixed term account but if things do go smoothly on the planning front (I'm an eternal optimist!) we'll then be forced to wait for it to be released before we can start on the work!

Ultrasonic · 2 June 2012 at 9:33AM

annagain wrote: »

However, for ease when I need to start dipping in, I'd like the money in one place...

The savings accounts I've had with online access (with Santander and the Halifax) allowed me to easilty transfer funds to any bank account, and I'd guess this is pretty standard now. So it will make very little difference from an ease of access point of view whether all of the money is in one place or not.

DiggerUK · 2 June 2012 at 9:34AM

After selling and moving we put our money for renovations in Premium Bonds, may not get any return, but they are instant access if you register for the phone and on line service; and you do say that you are an "eternal optimist"

As a guide, we started planning applications last November, and will be done and dusted by end of month.
..._

Ultrasonic · 2 June 2012 at 9:35AM

annagain wrote: »

I was thinking about putting some of it in a fixed term account but if things do go smoothly on the planning front (I'm an eternal optimist!) we'll then be forced to wait for it to be released before we can start on the work!

Some fixed term accounts will actually allow you to take the money out early if you are desperate for it, you will just lose most/all of the interest you would have earned. Some may have other charges. Read the terms and conditions of any account you are considering if this might be important.

Numpty ISA question

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