isa question and tax years and allowance

stolt

hi I already have a isa for this tax year but my wife hasn't, so I've opened a A&L isa for her and myself which will are lucky enough to be able to put the max 3000.00 in both, my question is it a better to transfer the money across and count my wifes isa as this years isa and then open another for her for next tax year.
what we were going to do was open up a savings account for 250.00 a month but it might seem better to put this money in the isa for next year on my wife, ie, the account will be taxed (halifax 7% saving acct) whereas the isa only gets 5.2% interest but tax free, that right in thinking that?

Also i have a ING isa from last year, can I transfer this to any other isa, mine or my wifes which would mean I would have 6000.00 in one isa, confused i thought you were only allowed 3000.00 each isa, or is that each year!!

also we made a boo boo on my wifes application i have my wifes and my A&L isa linked to my bank account, is this illegal I noticed when i did my application it said it must be linked to your own account, but my wife hasnt got the money in her account, should i have transferred the money to her account for her to then transfer to the isa.

robert_h_2

my understanding is that:
an individual can invest £3k in a mini cash isa per year
within that year, it is possible to transfer a mini cash isa from one provider to another (i did this from first direct to halifax when fd dropped their rate in september)
it is also possible to transfer previous isa years from another provider to a new provider to gain a better rate.

therefore
your wife should take advantage now of depositing £3k before april 5th. this counts for 2005, giving another £3k investment possible in 2006.

you can then transfer your old ing isa to your a&l isa, to benefit from 5.2%. these are previous year's investments and so the transfer of this money does not affect the current tax year's investment limit of £3k.

you should probably speak to a&l to sort out the current account linking. your current account should not be linked to your wife's isa account, as this effectively means you could transfer your own money into someone else's isa. as you havent made any payments, you have not contravened any laws.
you can transfer money from yours to your wife's current account, then your wife can deposit what is now her money into her personal isa.

hth
regards, robert

stolt

thanks for that it makes more sense to me now, esp hearing from someone else, I remember A&L saying that they will send paperwork onto me so I'll change the bank on that so that all reads correct.

still a bit confused. the A&L Isa's i've just signed up for are for 2006 or 2005?? what i mean is the A&L I've opened for my wife, do I go back onto the A&L website and open another for her for the next tax year or wait, likewise for me I already have an ING isa and just applied for a A&L isa but I don't remember the site asking me what year I wanted it for.

thanks

isasmurf

You have applied for an ISA for your wife (I hope she signed it!). The application is valid on the account from the point you put money in to the account until you go through an entire tax year without putting money into the ISA.

To be a bit clearer, when you first put money into the account is the point at which the account is opened in the eyes of the taxman. So put money up to 5th April 2006 and it is a 2005/6 ISA, after 5th April then it is a 2006/07 ISA. You do not have to apply again next year, just continue to put money into the same account.

If you go through a full tax year (6th April-5th April) without putting any money into the account then, under ISA rules, you will have to re-apply for the ISA to put money into that account in future years.

likewise for me I already have an ING isa

No you don't. ING Direct (UK) do not do ISAs.

stolt

isasmurf wrote:

You have applied for an ISA for your wife (I hope she signed it!). The application is valid on the account from the point you put money in to the account until you go through an entire tax year without putting money into the ISA.

To be a bit clearer, when you first put money into the account is the point at which the account is opened in the eyes of the taxman. So put money up to 5th April 2006 and it is a 2005/6 ISA, after 5th April then it is a 2006/07 ISA. You do not have to apply again next year, just continue to put money into the same account.

If you go through a full tax year (6th April-5th April) without putting any money into the account then, under ISA rules, you will have to re-apply for the ISA to put money into that account in future years.

No you don't. ING Direct (UK) do not do ISAs.

I've only done the bit online for my wifes isa at A&L so still waiting for the paperwork to come through.

just had a look at the paperwork for my isa and its intelligent finance mini cash isa, and not ING, don't know where I got that from.

thanks for the explanation on how it works, makes a lot more sense now..