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  • FIRST POST
    • RunningMan
    • By RunningMan 12th Jun 17, 2:54 PM
    • 430Posts
    • 132Thanks
    RunningMan
    Stocks & Shares ISA Question
    • #1
    • 12th Jun 17, 2:54 PM
    Stocks & Shares ISA Question 12th Jun 17 at 2:54 PM
    Quick question (hopefully) - I have a stocks and shares ISA that I have paid £200 into in the current tax year. Is it OK to just close this ISA, open a new one elsewhere and continue contributing so long as my total contributions don't exceed the £20,000 cap (I have no other ISA investments)?

    Or, do I need to do it as a transfer (I'd rather avoid this as it's a bit of a faff and I won't be going anywhere near the £20k cap anyway).
Page 1
    • frugalmacdugal
    • By frugalmacdugal 12th Jun 17, 3:03 PM
    • 6,080 Posts
    • 5,230 Thanks
    frugalmacdugal
    • #2
    • 12th Jun 17, 3:03 PM
    • #2
    • 12th Jun 17, 3:03 PM
    Hi,

    from MSE's Isa Guide,

    Current year's stocks & shares ISA. You can move ALL of this to another stocks & shares ISA or cash ISA, but you can't split it between more than one stocks & shares ISA.

    So looks like you'll need to transfer.
    Y'all take care now.
    • RunningMan
    • By RunningMan 12th Jun 17, 3:08 PM
    • 430 Posts
    • 132 Thanks
    RunningMan
    • #3
    • 12th Jun 17, 3:08 PM
    • #3
    • 12th Jun 17, 3:08 PM
    Thanks frugalmacdugal; re-reading it that does seem to suggest as you say.

    Let's try another question - if I was to close the one ISA and open another one without going anywhere near the limits what would be the likely or possible consequences?
    • isasmurf
    • By isasmurf 12th Jun 17, 3:43 PM
    • 1,719 Posts
    • 738 Thanks
    isasmurf
    • #4
    • 12th Jun 17, 3:43 PM
    • #4
    • 12th Jun 17, 3:43 PM
    Thanks frugalmacdugal; re-reading it that does seem to suggest as you say.

    Let's try another question - if I was to close the one ISA and open another one without going anywhere near the limits what would be the likely or possible consequences?
    Originally posted by RunningMan
    The second S&S ISA will be invalid, but may be "repaired" up to the combined value of subscriptions to all ISAs being below the annual allowance. This means that the second ISA will lose its tax exempt status between the date of the first subscription and HMRC issuing a notice of discovery to the ISA manager. This is not likely to be until at least 9 months after the end of the tax year to which it relates.
    • RunningMan
    • By RunningMan 12th Jun 17, 3:48 PM
    • 430 Posts
    • 132 Thanks
    RunningMan
    • #5
    • 12th Jun 17, 3:48 PM
    • #5
    • 12th Jun 17, 3:48 PM
    The second S&S ISA will be invalid, but may be "repaired" up to the combined value of subscriptions to all ISAs being below the annual allowance. This means that the second ISA will lose its tax exempt status between the date of the first subscription and HMRC issuing a notice of discovery to the ISA manager. This is not likely to be until at least 9 months after the end of the tax year to which it relates.
    Originally posted by isasmurf
    Thanks isasmurf. Not sure I fully understand you but sounds like I'm best to go with completing the transfer.
    • george4064
    • By george4064 12th Jun 17, 4:00 PM
    • 819 Posts
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    george4064
    • #6
    • 12th Jun 17, 4:00 PM
    • #6
    • 12th Jun 17, 4:00 PM
    If you know you will not be close to the ISA allowance you could sell the investments, withdraw the proceeds then deposit said proceeds into your new ISA account.

    Depends if you want to be out of the market for a day or two
    "If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett

    Save £12k in 2016 - #045 £10,358.81/£12,000 (86%)
    Save £12k in 2017 - #003 £9,136.98/£12,000 (76%)
    • RunningMan
    • By RunningMan 12th Jun 17, 4:08 PM
    • 430 Posts
    • 132 Thanks
    RunningMan
    • #7
    • 12th Jun 17, 4:08 PM
    • #7
    • 12th Jun 17, 4:08 PM
    If you know you will not be close to the ISA allowance you could sell the investments, withdraw the proceeds then deposit said proceeds into your new ISA account.

    Depends if you want to be out of the market for a day or two
    Originally posted by george4064
    I'd like to do this but are you sure it's allowed? It seems to conflict with what isasmurf says and also when opening the new ISA I have to accept the statement "I have not subscribed and will not subscribe to another stocks and shares ISA in the same tax year..."
    • george4064
    • By george4064 12th Jun 17, 5:27 PM
    • 819 Posts
    • 865 Thanks
    george4064
    • #8
    • 12th Jun 17, 5:27 PM
    • #8
    • 12th Jun 17, 5:27 PM
    I'd like to do this but are you sure it's allowed? It seems to conflict with what isasmurf says and also when opening the new ISA I have to accept the statement "I have not subscribed and will not subscribe to another stocks and shares ISA in the same tax year..."
    Originally posted by RunningMan
    You might be right, I'm not sure now thinking about it!!
    "If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett

    Save £12k in 2016 - #045 £10,358.81/£12,000 (86%)
    Save £12k in 2017 - #003 £9,136.98/£12,000 (76%)
    • greenglide
    • By greenglide 12th Jun 17, 5:36 PM
    • 2,838 Posts
    • 1,819 Thanks
    greenglide
    • #9
    • 12th Jun 17, 5:36 PM
    • #9
    • 12th Jun 17, 5:36 PM
    I'd rather avoid this as it's a bit of a faff
    ou fill in one form or you do it online.

    No more of a faff than posting here to see if you can get around it, surely!
    • isasmurf
    • By isasmurf 12th Jun 17, 5:47 PM
    • 1,719 Posts
    • 738 Thanks
    isasmurf
    If you know you will not be close to the ISA allowance you could sell the investments, withdraw the proceeds then deposit said proceeds into your new ISA account.
    Originally posted by george4064
    From HMRC guidance notes for managers:
    ISA investors must transfer their ISAs through the ISA manager. Investors cannot transfer an ISA by closing it and opening a new ISA with the new ISA manager (commonly known as ‘self transfer’), even if the investor is moving from one ISA product to another with the same manager.


    Thanks isasmurf. Not sure I fully understand you but sounds like I'm best to go with completing the transfer.
    Originally posted by RunningMan
    The second ISA will be invalid and be subject to income tax and CGT as if it wasn't an ISA up to the date HMRC inform the ISA provider it has repaired.

    Once HMRC has discovered that you have subscribed to two ISAs of the same type and are under the allowance for the year, they will write to you to check the information. Once confirmed they will inform the ISA provider, to tell them and give a date from which the account will operate as an ISA exempt from income tax and CGT from that date onwards.

    If this was a cash ISA it would be allowed the first time, but for some reason the exemption for the first self transfer doesn't apply to other ISAs.
    • AnotherJoe
    • By AnotherJoe 12th Jun 17, 6:22 PM
    • 7,228 Posts
    • 7,735 Thanks
    AnotherJoe
    The repurcussions for not transferring will be far more onerous than filling a form in to transfer.
    • RunningMan
    • By RunningMan 12th Jun 17, 7:21 PM
    • 430 Posts
    • 132 Thanks
    RunningMan
    Thanks for the info and advice folks, I'll do the transfer.
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