Help: I think 2 ISAs have been opened

Lokolo

aqueoushumour01 wrote: »

I'm learning every day.

Yes a lot of the time we say you cannot open 2 ISAs a year because a lot of people get confused otherwise!!

Basically I could open 10 ISAs this year with £0 in, as long as I only contribute to one its all fine and dandy.

But basically if we started saying you can open as many as you can then havoc is released.

Blah99

aqueoushumour01 wrote: »

I have 1 cash ISA, and 2 S&S ISAs! I went into the bank two days after opening the first one to top up the S&S ISA. However, it appears that a second one has been opened instead, so I now have two S&S in the same cash year!

Okay, so you have 1 cash ISA, which we can disregard. You had 1 S&S ISA, which you wanted to transfer money into. Unfortunately your bank screwed up and opened a new S&S ISA for you, then transferred the money into that.

Is that right?

If so, the crux is where that money came from. If it came from a current account then don't worry about it. Transfer it straight back out before you earn any interest or make any growth on it, and put it into the other S&S ISA that you do want to use. Keep the statement that shows the transfer in, zero growth, transfer out. If you get questioned by HMRC you can demonstrate that you made no taxable gains, and that they can disregard/treat that account as taxable.

However if the money came from an ISA you might be in all sorts of trouble. I'm not sure what happens in this case because you would potentially lose the tax-sheltering ISA wrapper - when you open 2 ISAs in the same year and pay into them both, HMRC designate one as a normal taxable account. So taking money from an ISA and putting it into an ISA that's designated as taxable means you'll lose the ISA shelter status.

However! If you can prove that your bank screwed up your instructions they will be liable for sorting the mess out and making sure you keep your ISA status. Check back over your documents and make sure everything was correct from your side of things, and that you can prove the bank screwed up. Raise a complaint at your bank, then call HMRC and explain what's happened. It's the HMRC advice line's job to help you sort these kinds of problems out, and if it wasn't your fault then you'll somehow come out of this ok.

aqueoushumour01

Blah99 wrote: »

Okay, so you have 1 cash ISA, which we can disregard. You had 1 S&S ISA, which you wanted to transfer money into. Unfortunately your bank screwed up and opened a new S&S ISA for you, then transferred the money into that.

Is that right?

If so, the crux is where that money came from. If it came from a current account then don't worry about it. Transfer it straight back out before you earn any interest or make any growth on it, and put it into the other S&S ISA that you do want to use. Keep the statement that shows the transfer in, zero growth, transfer out. If you get questioned by HMRC you can demonstrate that you made no taxable gains, and that they can disregard/treat that account as taxable.

However if the money came from an ISA you might be in all sorts of trouble. I'm not sure what happens in this case because you would potentially lose the tax-sheltering ISA wrapper - when you open 2 ISAs in the same year and pay into them both, HMRC designate one as a normal taxable account. So taking money from an ISA and putting it into an ISA that's designated as taxable means you'll lose the ISA shelter status.

However! If you can prove that your bank screwed up your instructions they will be liable for sorting the mess out and making sure you keep your ISA status. Check back over your documents and make sure everything was correct from your side of things, and that you can prove the bank screwed up. Raise a complaint at your bank, then call HMRC and explain what's happened. It's the HMRC advice line's job to help you sort these kinds of problems out, and if it wasn't your fault then you'll somehow come out of this ok.

That's right. I funded from a current account, but I'm already about £100 down on the second deposit given market movements over the last 3 business days. So it looks like either I take the hit, or I complain to the bank - but I don't want to risk my ISA allowance on my cash ISA. What a pain!

Mikeyorks

aqueoushumour01 wrote: »

However, it appears that a second one has been opened instead, so I now have two S&S in the same cash year!

Which is potentially resolvable by your provider if they made the error and, importantly, you're within the £7200 overall ISA limit (your Cash ISA + both the S&S ISAs)? Don't contact HMRC .... unless your provider asks you to do that.

tartanterra

Just a thought but............
Knowing the current shambles that is HMRC, is the system clever enough to realise that someone is contributing to more than one ISA??????:rotfl:

masonic

tartanterra wrote: »

Just a thought but............
Knowing the current shambles that is HMRC, is the system clever enough to realise that someone is contributing to more than one ISA??????:rotfl:

Yes, because the ISA managers report back to HMRC and it's easy for a computer to mine the data for duplicated NI numbers and compile a list of offenders. Going on what's been posted here in the past, if it's your first offence, you just get a letter warning you not to do it again.

masonic

aqueoushumour01 wrote: »

That's right. I funded from a current account, but I'm already about £100 down on the second deposit given market movements over the last 3 business days. So it looks like either I take the hit, or I complain to the bank - but I don't want to risk my ISA allowance on my cash ISA. What a pain!

This problem shouldn't have any effect on your cash ISA, where the rules have been followed. It's only your second S&S ISA that is in any way at risk.

As others have said, this can be sorted out by Nationwide/L&G. There are provisions in the ISA rules for ISA managers to repair mistakes made as a result of them misinterpreting your instructions. They are there for exactly this type of situation. At the end of the day, they are going to look pretty silly if HMRC discovers that they let you open a second S&S ISA when they already held your current years contributions.

aqueoushumour01

I suppose it's both our faults really. I went in to top up my ISA, and this was clear to the staff. On their computer systems they went to 'Apply/Top up' and followed the instructions (first time they had done it) and we went through the process together. They knew I had opened an S&S ISA two days earlier. At the end it got to the page with the small print - which was the same as that when I opened up the first ISA. With hindsight this should have rung some alarm bells, as it said something like 'you agree not to subscribe to more than one ISA....' but I was at the bank to top up my existing ISA, so that (at the time) was irrelevant i.e. it didn't apply as I wasn't opening another ISA - I was topping up. I suppose Nationwide could fall back on the documentation and make it my fault, even though I made it clear I wanted to top up my existing ISA, and we were both working on this assumption. I had no interest in opening up exactly the same account again a couple of days later! I'll go to the bank tomorrow and see what can be done.

Mikeyorks

The question (my earlier post) as to whether you're within the £7200 overall ISA limit is relevant to their ability to fix it????

aqueoushumour01

Mikeyorks wrote: »

The question (my earlier post) as to whether you're within the £7200 overall ISA limit is relevant to their ability to fix it????

I am well within the 7200 limit so hopefully that will make sorting it out more straightforward.