Is it possible to exceed the ISA limits? If so, what happens?

Kodos84

Hi,

I'm not asking if you are "allowed" to exceed the £7,200 limit, but if it is possible to do so? and what happens if you do?

E.g. Put £3,600 into isa with one bank, and >£3,600 into a stocks & shares isa with another bank/broker.

I only know that a bank will stop you from putting more than £3,600 into the same cash isa account.

masonic

It is possible and it will get flagged by HMRC. In the first instance, it would seem they simply write to you and tell you not to do it again.

Beyond that, the process according to the ISA rules is that somebody (either HMRC, the ISA manager, or you) will notice and it is then up to the ISA manager to "repair" the account by returning your excess funds. Between the date of the oversubscription and the date the account is repaired all ISA benefits are withdrawn from the account (so where a cash ISA is involved, tax would become payable on all of the interest earned between those dates).

chambta

You'll more than likely get a letter from the HMRC. They will also write to the bank to ask the second account be closed.

Paul_Herring

They will also write to the bank to ask the second account be closed

Unlikely given the situation proposed by the OP - they aren't two cash ISA accounts.