Adding to an Old ISA

Oblivion

Lokolo wrote: »

My Egg one from last year states I can deposit money into that.....

Yes of course you can, if you subscribed to it in the previous year. My question is about an old ISA that has NOT been subscibed to in the previous year.

Dave.

Oblivion

dzug1 wrote: »

Most providers will treat this as a new ISA application - whether as a result of internal rules or HMRC directive I don't know.

And to be honest from your point of view it's academic as to whether you are opening a new ISA or adding money to an old one, assuming the T&C of the two are the same.

Ah, but what if my old existing ISA is still offering a better interest rate than the new ISAs on offer? Unlikely I know, but not impossible.

Dave.

Oblivion

anniehanlon wrote: »

you cannot add to an Isa when it is full. What you have to do is start another ISA with the same company then they add the amount together
it all goes into the same account no. as the old one.

With the greatest of respect annie, I think that response is a bit misleading. A cash ISA is only 'full' at a point in time during any tax year when you have paid in your annual quota (currently £3,600), but as soon as the 6th April comes around, it is no longer full and you are eligible to deposit another year's allowance into the SAME ISA, you certainly don't have to 'start another ISA with the same company'.

Dave.

debbie42

Lokolo wrote: »

My Egg one from last year states I can deposit money into that.....

There is a difference between the previous tax year's ISA and older (lapsed) ones. Some providers do let you add to existing ISAs. However, if you have not added to the ISA in the previous tax year then you cannot add to them via an electronic transfer without breaking HMRC rules.

debbie42

Oblivion wrote: »

This has left me with several old cash ISAs that have not been contributed to for several years, but to which I may want to add contributions to in future years. I seem to remember reading somewhere that you can do this, but that you need to submit a form of some sort to the provider to reactivate the old ISA, but I have been unable to verify this or indeed find the appropriate form if it exists.

The guidelines here seem pretty clear that you have to open a new one, under the new rules:

http://www.hmrc.gov.uk/ISA/rule-change-april08.htm

quote:

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Q. Will I have to sign any new forms if I want to continue paying in to my ISA?

A. No - as long as you:

• saved in that ISA in the previous tax year
• signed a continuous application form for that ISA, and
• have not already saved in another ISA of the same type (cash or stocks and shares) during the current tax year.

However, if you transfer your ISA to a new provider, you did not sign a continuous application form, or you did not save in your ISA in the previous tax year then you will have to complete a new ISA application form.

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Oblivion

debbie42 wrote: »

The guidelines here seem pretty clear that you have to open a new one, under the new rules:

http://www.hmrc.gov.uk/ISA/rule-change-april08.htm

quote:

---

Q. Will I have to sign any new forms if I want to continue paying in to my ISA?

A. No - as long as you:

• saved in that ISA in the previous tax year
• signed a continuous application form for that ISA, and
• have not already saved in another ISA of the same type (cash or stocks and shares) during the current tax year.

However, if you transfer your ISA to a new provider, you did not sign a continuous application form, or you did not save in your ISA in the previous tax year then you will have to complete a new ISA application form.

---

Thanks Debbie, I think that final paragraph does indeed nail it ... "or you did not save in your ISA in the previous tax year then you will have to complete a new ISA application form".

It does seem to be a bit daft though to make people go through all the aggro of filling out a new application form for the provider, when an account already exists. I really cannot see the sense in that. Just more unnecessary government BS I'm thinking.

Dave.

Mikeyorks

The implication in the OP - that you have to re-apply in order to add contributions to a lapsed ISA (i.e not contributed to for a full year) - is generally correct. But the mechanisms vary depending on the supplier - I've never seen a standard form.

The detail was contained in the 2007 and prior HMRC notes, which have now dropped from the website (last I looked). The changes relating to 'continuous application' have drifted in over the last year or so. But ........ it is unlikely you signed a continuous authority for any of your ISAs that have lapsed, so you would need to revitalise them.

Oblivion

Mikeyorks wrote: »

The implication in the OP - that you have to re-apply in order to add contributions to a lapsed ISA (i.e not contributed to for a full year) - is generally correct. But the mechanisms vary depending on the supplier - I've never seen a standard form.

The detail was contained in the 2007 and prior HMRC notes, which have now dropped from the website (last I looked). The changes relating to 'continuous application' have drifted in over the last year or so. But ........ it is unlikely you signed a continuous authority for any of your ISAs that have lapsed, so you would need to revitalise them.

Thanks for that Mike, and having researched further I do agree with your interpretation.

It does beg the question though, particularly in the light of certain responses to this thread, just how many people have deposited money in 'dormant' ISAs without having gone through the 'revitalising' process. The tax man could have a field day.

Dave.

Cannon_Fodder

"with several old cash ISAs that have not been contributed to for several years, but to which I may want to add contributions to in future years"

I think the likelihood of your dormant accounts becoming top of the comparison tables is too remote to be worrying about form-filling...

Personally I would transfer all the dormant account contents into the latest, top rate ISA that allows transfers-in.

With complex Ts&Cs often employed, a Provider offering a good rate on their new product may not allow transfers-in from existing in-house products - so you are spreading the chance of your dormant products being in the wrong place at the wrong time.