Loss of tax-free status too?

BigTezza

Apologies if this is a dumb question........As well as a savings account I've got 15K in an Icesave ISA and have everything crossed that I'll get my savings back.If I do get them back does that mean that it'll arrive in one lump and will have lost it's "ISA status"? In other words, as I've used up my ISA allowance for this year all I'll be able to do is start a new ISA next April and put in £3600 while the rest sits in a normal savings account paying tax on the interest? I don't have much of a pension so I've been putting all I could afford in to an ISA to maximise the tax free benefit. Now it would seem that this gain has been scuppered by Icesave's stupidity.I just thought I'd ask - mind you I'm now sick of hearing and seeing the word "Icesave" to be honest and after the stress of the last day or so I think I'd be happy just to see my money again - taxable or not. If it takes months to reclaim, it would also be nice to see it come back with the interest it would have accrued if everything hadn't gone breasts skywards and the Icelandic financial system had done it's job properly. Ho hum.Thanks.PS. Is it true that Icelandic customers are free to do what they want with their Icesave money at the moment and it's only the Brits who are locked out? Surely that must break some form of International law or something? Just a thought.

nzseries1

This isn't certain yet. It's discussed in this article:
http://www.moneysavingexpert.com/savings/safe-savings
The article says that in the case of Northern Rock, people did not lose their ISA status.

Stompa

http://www.hm-treasury.gov.uk/press_101_08.htm

3. Arrangements are being put in place to ensure that all ISA customers of Icesave will continue to benefit from the tax-free status of their accounts.

BigTezza

Well that would be handy if it does come about. Thanks for the info.I'm off to catch a plane to Iceland now, put on my best chunky sweater, adopt an Icelandic accent and then visit an ATM up there to draw out my ****** money ;o)

fatbob10

Chortle Big Tezza - quite funny that post. For what its worth I dont think anyone will end up losing their tax free status on ISA's - it might not be top of the treasury's list of things to work out right now but Im sure the Treasury will fix that issue in due course.

hyposmurf

This is great news but when I can start up a new ISA?Could I start up one now or should I wait?Do I have to wait until my other ISA has been frozen?

nzseries1

hyposmurf wrote: »

This is great news but when I can start up a new ISA?Could I start up one now or should I wait?Do I have to wait until my other ISA has been frozen?

I'm 99% sure you'd have to wait, although perhaps someone else can give a second opinion.

Crabman

hyposmurf wrote: »

This is great news but when I can start up a new ISA?Could I start up one now or should I wait?Do I have to wait until my other ISA has been frozen?

Have you opened one since April this year? If so then you can't open another till the next financial year. If not, you've until April 2009 to open one.

Details in the article: http://www.moneysavingexpert.com/savings/best-cash-isa

fatbob10

doubt if anyone can answer that with any authority right now - I would think wait for the dust to settle .

hyposmurf

I transfered from one into my now unaccessable frozen Icesave ISA.Surely if Im not contributing into this ISA then I open a new one and deposit money in the new ISA the old ISA becomes frozen.

Crabman

hyposmurf wrote: »

I transfered from one into my now unaccessable frozen Icesave ISA.Surely if Im not contributing into this ISA then I open a new one and deposit money in the new ISA the old ISA becomes frozen.

It sounds like you've transferred an ISA from last year. If you've not contributed to an ISA this financial year then you're free to open a new one (e.g. a Cash ISA).

I'm not sure what you mean by 'frozen' - you're not able to add more than £3600 into a Cash ISA per financial year, is that what you're referring to?