The Best Mini Cash ISA Article Discussion Area

exel1966

--Tony-- wrote:

Will I continue to pay no tax on the interest after I move to a new account or will the A&L consider this excess cash and charge tax?

Many thanks Tony

You'll never pay tax on it (until the Govt scraps or amends the scheme) regardless of how many times you transfer money between ISA's. Once you have your new A&L ISA transfer (DO NOT Withdraw) the Abbey ISA's including all interest earnt to date into it to ensure you're earning the max interest possible. NO tax will be payable.

ps. If you haven't already opened an ISA in the 2005 - 2006 tax year, then do so now if you need to deposit any funds outside of any ISA currently held. Then you'll be able to open another after 5th April.

DonkeyKong77

hi

I am a bit confused - in one of the posts earlier - a Direct ISA version 2 was mentioned but on A&L's website, when i go to click through to apply - its version 1 - is this correct?

Thanks

exel1966

You may be using an old link ? Try here :-

https://www.alliance-leicester.co.uk/savings/index.asp?page=direct-isa&ct=flashprimdisamar06tile

DonkeyKong77

Again daft question but - is Wednesday April 5th the last allowable date to put funds into an ISA or is that too late?

waiting on funds to transfer and trying to work out if i will make it in time for the A&L (it says allow 3 days to transfer from a different bank) otherwise i can go for the Halifax ISA (which would allow for 1 day, since the account is with them)

ratman633

I applied yesterday online to open the above account. They replied today and refused my application. Said they would write and explain why in a few days. Is it common to be refused an account? I have never been refused any type of account before and have just over £10000 to transfer in from my existing isa.
Still i suppose if they don't want my money i'll just have to try the Halifax!

Thanks

grumbler

ratman633 wrote:

... Is it common to be refused an account?

Not very common, but happens sometimes, particularly with A&L: A & L refused my application for Direct ISA

Still i suppose if they don't want my money i'll just have to try the Halifax!

Halifax are reducing their variable rate in April. Although there are other 5% ISAs, you can appeal A&L rejection. I think this is a result of some discrepancy with ID check.

anitha

Hi,

I have just started to read on the mini cash ISA'a and am wondering if I can get an account opened for hubby and I before 5th april.

We have all our savings in ing direct and do pay tax on it. However a friend has advised that as we are both higher rate taxpayers , we should be paying more tax on this ? Can we still invest in the ISA without getting into trouble with the taxman - we both dont fill in tax forms cos we have not been asked to.

grumbler

anitha wrote:

...We have all our savings in ing direct and do pay tax on it. However a friend has advised that as we are both higher rate taxpayers , we should be paying more tax on this ? Can we still invest in the ISA without getting into trouble with the taxman - we both dont fill in tax forms cos we have not been asked to.

Basic tax on savings interest is 20%. If both of you are higher rate taxpayers, you must pay 40% tax on your savings interest besides ISA interest that is tax-free. AFAIK the only way you can do this is by submitting some form to IR. It is tax evasion :eek: if you don't do this.
It was a wise advice for both of you to have cash ISAs. If you don't open them before 5th of April and don't deposit 2*£3K you lose this year allowance. I don't think you have enough time for transfer from ING now. If you don't have £6K on your current account(s), I think you can try to transfer money from ING today or tomorrow to the current account(s) and open ISAs in a branch on 4th or 5th with cheque deposits. If you open ISAs in other bank, cheques take time to clear that will be, possibly, enough for money from ING to arrive. The other way is using your overdraft(s). If it is not big enough, ask for an increase.

Mikeyorks

anitha wrote:

However a friend has advised that as we are both higher rate taxpayers , we should be paying more tax on this ? Can we still invest in the ISA without getting into trouble with the taxman - we both dont fill in tax forms cos we have not been asked to.

The post from Grumbler is spot on as regards your extra tax liability and the fact the onus is on you to declare it - not on HMRC to catch you.

ING will tell HMRC about the interest they pay you (which does not change the sentence above) - so are you sure there are no restrictions in your PAYE code to cover the higher rate clawback?

Voyager2002

I notice that the article spoke highly of the Alliance and Leicester direct ISA. However, I recently considered opening one, and spent some time on the relevant webpage. This made it clear that if you wish to transfer funds out of it to another ISA provider (which you might want to do if thir rate were to become uncompetitive) you could only request a transfer by calling an 0870 number. Even worse, the implication seemed to be that you had to pay a transfer fee.

Since Martin's article as good as states that there is no fee for transfering funds out of this account to another ISA provider, perhaps he could clarify the situation.