ISA rules - Barclays letter

fm663

I am new to ISAs. Sometime last year I opened an Tax Haven ISA account with Barclays and deposited only 10 pounds.


This week I have received a letter from Barclays with the following lines:

A quick reminder about ISA rules

Just so you have them for reference, here are the ISA Scheme Rules set by HM Revenue & Customs.

If you have subscribed to your cash ISA this tax year (2008-09), you will not be able to subscribe to another cash ISA in the next tax year (2009-10). If you continue to subscribe to this cash ISA in the next year. The 2009-10 tax year runs from 6 April 2009 to 5 April 2010.

The maximum you can subscribe to your cash ISA in any tax year is 3,600 and you must not subscribe more than 7,200 in total to ISAs in a tax year.

Why can I not have another Cash ISA next tax year? Should I pay remaining 3,590 into this account?

I thought we can have only 1 Cash ISA account per year. Can anyone please explain how this works. Thanks

PaddyOReilly

Easy one this, plus I too jumped to the same conclusion you did but re-read the letter several times when it finally clicked.

fm663 wrote: »

If you have subscribed to your cash ISA this tax year (2008-09), you will not be able to subscribe to another cash ISA in the next tax year (2009-10), if you continue to subscribe to this cash ISA in the next year. The 2009-10 tax year runs from 6 April 2009 to 5 April 2010.

The first full stop above should be a comma; so if you continue to fund the ISA on or after 6th april you're using your 08/09 ISA account (e.g. tax haven ISA) to hold your 09/10 ISA allowance as well. It's not the best worded letter I've ever read.

I imagine you're in the same position I'm in, in that I'm filling up my 08/09 Tax Haven ISA before the 6th and then probably opening a 09/10 Gold ISA afterwards. Hope that explains it.

Baldur

PaddyOReilly wrote: »

I imagine you're in the same position I'm in, in that I'm filling up my 08/09 Tax Haven ISA before the 6th and then probably opening a 09/10 Gold ISA afterwards.

At a current rate of 2.08% (or 1.08% if your 12 month introductory bonus has finished), I would hope that you are also considering transferring your Tax Haven to a different provider that accepts transfers and offers a more competitive rate?

PaddyOReilly

Baldur wrote: »

At a current rate of 2.08% (or 1.08% if your 12 month introductory bonus has finished), I would hope that you are also considering transferring your Tax Haven to a different provider that accepts transfers and offers a more competitive rate?

Of course, I'm not that loyal to Barclays.

Inactive

No " Plain English " awards for that one.:rotfl:

GiraffeMan

Inactive wrote: »

No " Plain English " awards for that one.:rotfl:

That wording has been taken direct from the HMRC guidelines it would seem...Ive seen that before on my BMW ISA declaration

fm663

Thanks guys. That makes sense now. At first I got scared thinking that I might have missed something in the fine print.