ISA's - A world of confusion

ricky_v

Hi there

Basically I started my first ISA in Tax year 08/09, which is a Barclays "Tax haven ISA". at the start of this tax year, i also opened up a natwest "cash ISA plus", contributed to that ISA, and left barclays alone. both combined are near the current £3600 limit.

My question is, for next April, I want to transfere both ISA's, plus extra to make it up to the new limit of £5,200 to whoever has the best rate, Will i need to give both banks warning to avoid penalties (i couldnt see any on what paperwork i have), plus the barclays was started at a funny time, at the end of May, is there any penalties if i dont let an ISA run for a whole year?

sorry if this seems an abvious question, But im pritty clueless when it comes to this.

Thanks very much

Lokolo

The Barclays cash ISA does not have any closing terms and conditions.

By the way, you say you have 2 ISAs and the combined total is less than £3,600. You realise that each ISA can have £3,600? So you could have (you can't now obviously), put £3,600 into Barclays, then the new year when you opened your Natwest one, you could have put another £3,600 in that?

Hence in April 6th 2010 you can open a new ISA and deposit a further £5,100.

ricky_v

oh bladdy hell i thought it was combined isas never mind haha.

So i assume i can have 3600 in natwest plus the Barclays for this year, and come april i can close barclays and bring natwest to 5100, and start paying into another one for that year? or does the allowance increase happen at such a time that i cannot do that?

as you can see i am thick when it comes to this haha

thanks again

Lokolo

ricky_v wrote: »

oh bladdy hell i thought it was combined isas never mind haha.

So i assume i can have 3600 in natwest plus the Barclays for this year, and come april i can close barclays and bring natwest to 5100, and start paying into another one for that year? or does the allowance increase happen at such a time that i cannot do that?

as you can see i am thick when it comes to this haha

thanks again

You don't have to close it you can leave it open.

You cannot bring Natwest to £5,100. Once the tax year is over, thats it, that ISA is done. You then have a new allowance, so £5,100. You can do

a) Open a new ISA and put £5,100 in that
b) Put the £5,100 in an old ISA.

So if you want to do b), and put the money in Natwest, it means you can have £3,600 in it now, then in April 6th (new year), you can top it up by £5,100 (as the allowance is obviously going up). But once you've done that thats your allowance spent.

Inactive

If the OP is over a certain age, they can add to the £3600 allowance now.;)

Can't remember the age limit.

chris_m

50, IIRC - although I have seen posts that some institutions' systems can't handle the change for some people and not others, so those that are eligible now have a few hoops to jump through to get more money accepted.

dunstonh

The ISA allowance is a contribution allowance. Not a balance allowance. What the balances become doesnt matter.

ricky_v

yeah, i think got my head round it now thanks, in April ill probably leave natwest at 3600, and start paying into another one up to 5100 (whoever has the best rate)

BTW, i dont qualify for the 5100 limit now

thanks again