Can I open two Isa's this year?

Wombat1

I would be grateful for any advice as I am new to Isa's and am in a bit of a muddle.

I had an Isa with A & L last tax year which has £3,600. The rate for this year has dropped from 3.5% to 1% so I need to to transfer it. I am OK about how to do this and finding a new decent rate.

I would like to keep saving each year in an Isa but don't know whether in addition to transfering the A & L Isa to a new Isa, I can also open another Isa this financial year so that I can keep saving each month.

Is it the case that as long as I don't put more than £5,100 into an Isa I can open as many as I want in one financial year, or can you only open one Isa each year? Can I in one financial year transfer an Isa into a new Isa and also open a new Isa as well? Or is it the case that after transferring my existing Isa I can only top this up with up to £5,100 this year? I am SO confused.

Any suggestions gratefully appreciated.

Thanks.

CLAPTON

you can transfer your old ISA to another ISA provider (if they allow it of course)

you can contribute to a second new ISA as long as you haven't contributed new money to the first new one.

so you can have two new ISAs as long as you only contribute new money to one.

blueberrypie

The rule is that you can only *subscribe* to one ISA in each tax year. Subscribing means putting in new money. Money which is transferred from one ISA to another does *not* count as "subscribing". (Note that you have to do the transfer properly through the new provider - you can't just withdraw it and deposit it with the new provider yourself. That *would* prevent you from doing anything more than topping up to £5100.)

So you can transfer your old ISA and put new money into another one. (You could also transfer and add your new funds to the same place you've transferred to, but rates for new money are generally better so it's probably not advisable.)

Jake'sGran

The last reply has confused me.

You cannot open two cash ISAs in the same year.

Your allowance this year is £10200.00 Only £5100.00 of this can go into a cash ISA. The other half can be put in a stocks and shares ISA............. OR

All of the £10200 can be invested in a Stocks and Shares ISA

At the top of this section you can find a list of the best cash ISAs available.
The best rates are always for longer terms. I recently opened one for 2009-10 giving a rate of 4.6% fixed for five years. I don't like long term ISAs but this one allows 25% of the money invested to be withdrawn during the term without any penalty.

steveksullivan

I'm fairly sure that the original poster was (as has been correctly identified in other replies ....) confusing TRANSFERRING to a new provider as opening a new ISA ..... and was asking whether they counld do this AND open' a second ISA for new money..... which of course they can.....

blueberrypie

Sorry for confusing you - and for managing to delete a bit of what I wrote before I posted it! If I remember what I meant to say, I'll edit it ;-)

I think a lot of people are confused by hearing that they can't open more than one cash ISA in the same year - because people think of "opening" an account as filling in the forms, getting the account number, etc - and that's not the bit that HMRC cares about. That's why I think that it's better to talk about "subscribing" to an ISA, and to be perfectly clear about what that means.

It's perfectly legal to set up an ISA and put the current year's allowance into it and *in the same tax year* set up *another* ISA but only fund it with transfers from older ISAs. I think by most people's definitions, that would count as "opening" two ISAs - but they would, of course, only be *subscribing* to one of them. Indeed if you'd five ISAs set up in five previous tax years, you could "open" five ISAs and fund them with the money from the old ISAs, and also open yet another ISA for your 10/11 allowance. Only the latter would count as *subscribing*.

It's also perfectly legal to set up and ISA and put the current year's allowance into it and *in the same tax year* set up *another* ISA ready for the next tax year's allowance. Again, most people would think of that as "opening" two cash ISAs.

Being clear that the rule is about *funding*, and about where the funds come from, rather than setting up an account, also makes it plainer that you can't put new money into two ISAs during the same tax year, even if one of the ISAs was opened in a previous tax year - i.e., if you have an ISA set up in 09/10 and another set up in 10/11, you cannot fund both with new money during 10/11.

steveksullivan

Hopefully pretty much what I said in the post above but much more clearly put !

Guess you were probably typing yours as I posted mine!

Wombat1

Thank you Clapton, Blueberrypie, Jake'sGran and Steveksullivan.

Great advice - I am much the wiser - and very grateful for your assistance!