ISA question

mike22

I have opened a Cash e-ISA account with HSBC, put in it £3600, then I withdrew the money and closed this account.

After I month, I opened a new Cash e-ISA account with HSBC again, and now I am trying to deposit into it.

Am I okay with this?

Robert_Sterling_3

NO YOU CAN NOT.

mike22

So what shall I do no?

I already put £500 in the new account, and HSBC did say nothing.

Obukit

When did this happen. In general, you can deposit £3,600 per tax year (6 April - 5 April). Thus, in Martin's words: -

Put £2,400 in and there's £1,200 of this year's allowance left. Withdraw £1,000 from it, and you may still only contribute £1,200 more. The fact you've withdrawn the money doesn't change anything.

However, if you withdrew your money in March, then opened a new one in April, this would be okay, albeit a waste of your ISA allowance. HSBC should have returned the money if you'd opened more than one in a tax year.

Aegis

I believe you can do one manual transfer each tax year, but you'd have to look up the rules to see if this is specifically allowed/not allowed. Maybe someone with more experience can say if this is actually ok with HMRC rules, as I recall that someone else did this around a year ago and it turned out to be ok as long as it's with this year's contribution and only once.

Hopefully someone else will clarify.

KingL

http://www.hmrc.gov.uk/leaflets/isa-factsheet.htm

Duplication

Remember you cannot invest in more than one cash ISA, or more than one stocks and shares ISA in the same tax year.

Mistakes do happen. If you do invest in more than one ISA of the same type in a tax year, the second ISA will not be tax-advantaged.

If this has happened call our ISA helpline. Have the details of your ISA accounts to hand when you call.

HSBC did say nothing.

It's not up to the bank to ensure your compliance. When you open an ISA you will have to sign a declaration that you have not used this years allowance. You have.

Haven't heard of Aegis's case...

Suggest you call HMRC on 0845 604 1701 . Worse case - your second ISA won't be an ISA. Maybe they'll be able to help out beyond that.

Doomcow

HEREs a question.

if i deposited 3600 now, and then 1500 next june, then if in august i wanted to withdraw 2000, then would that 2000 be make up of 1500 of this years and 500 of last years, or could i specifiy that its 2000 from last year so i could continue to fill this years allowance?

rb10

In each tax year you only add up what you pay in ... withdrawals are not counted as part of it at all.

So if you'd paid in £1500 in a tax year, you would still have £2100 to pay in, regardless of what you'd withdrawn.

Doomcow

roger.

i was just lookin at it from some funny angle.

Hungerdunger

Aegis wrote: »

I believe you can do one manual transfer each tax year, but you'd have to look up the rules to see if this is specifically allowed/not allowed. Maybe someone with more experience can say if this is actually ok with HMRC rules, as I recall that someone else did this around a year ago and it turned out to be ok as long as it's with this year's contribution and only once.

Aegis - are you getting confused between transfers and withdrawals? You can certainly transfer an ISA, but this is done between the banks/building societies on your behalf.

My understanding is that once the money is withdrawn by you it cannot be put back into an ISA in the same tax year if it brings the total you have paid in above £3,600.

Aegis

Hungerdunger wrote: »

Aegis - are you getting confused between transfers and withdrawals? You can certainly transfer an ISA, but this is done between the banks/building societies on your behalf.

My understanding is that once the money is withdrawn by you it cannot be put back into an ISA in the same tax year if it brings the total you have paid in above £3,600.

The understanding I have is that you can do a single "manual transfer" of ISA funds each tax year, where you take the funds that you have invested this year (and only this year) and withdraw them from one ISA account to deposit them in another. I may be mistaken, but I believe I saw this suggested as a loophole for someone who accidentally closed their ISA account and withdrew all their money last year. They weren't able to put the whole amount back in, but they could re-deposit that year's contribution to a new account.

Rules may have changed, my memory may be wrong, and unfortunately I can't remember who suggested it to chase up! A brief scan of HMRC's website doesn't yield anything good, so maybe I'm remembering it all wrong.