Can 2 cash ISAs be legal?

ConfusedOfCatford

Situation: Two cash ISAs, one was subscribed to last year (08-09), the other has not received deposits for at least two years, consequently this is earning only 0.25% interest. Neither has been subscribed to this year (09-10).

Plan: 1/ Transfer the "current" ISA to a reasonably high-earning instant access internet ISA.
2/ Transfer the "old" ISA to a high-earning, long-notice, telephone or branch ISA and NOT deposit anything into it during this year, so it won't be subscribed to, will it?

Is this legal and tax-free?

Any

Completely legal and tax free.

Baldur

ConfusedOfCatford wrote: »

Situation: Two cash ISAs, one was subscribed to last year (08-09), the other has not received deposits for at least two years, consequently this is earning only 0.25% interest. Neither has been subscribed to this year (09-10).

Plan: 1/ Transfer the "current" ISA to a reasonably high-earning instant access internet ISA.
2/ Transfer the "old" ISA to a high-earning, long-notice, telephone or branch ISA and NOT deposit anything into it during this year, so it won't be subscribed to, will it?

Fine - they are both 'old' ISAs - a current ISA is one to which you have subscribed in the current tax year.

As you have not used any of your current tax year's subscription, you could also open & subscribe up to £3,600 to yet another Cash ISA or subscribe it to either of the accounts in 1 or 2 above, assuming that they accept additional payments.

PinkPig

Yes, absolutely fine. You could add this year's subscription to either of the two accounts, or open a third account to put this year's subscription in.

The rule is that you may not subscribe (add new money from outside an ISA) to more than one ISA in any tax year - ie. you couldn't split up the current year's subscription between more than one ISA, but you can open any number of accounts to accept transfers only.

Remember that not all ISAs accept transfers in - this is up to the provider.

pukkapie

i have a similar dilemma. i want to transfer my current cash isa to a new one with a higher rate, but put no money into this new cash isa this year. i also want to open up a stocks and shares isa and put £7200 into that this tax year. is this possible?

Baldur

pukkapie wrote: »

i have a similar dilemma. i want to transfer my current cash isa to a new one with a higher rate, but put no money into this new cash isa this year. i also want to open up a stocks and shares isa and put £7200 into that this tax year. is this possible?

Yes, as long as the Cash ISA to which you wish to transfer accepts transferred previous tax year's/years' funds and doesn't require you to subscribe any of your 2009/10 allowance.