Can I open new ISA in April if I've deposited current one this month?

tashalove

Hello

After saving in ISAs for a number of years I still can't get my head around regarding the allowance. I transferred my exisitng ISA to a new provider this month and they insisted I pay £1 to open. Thus I have deposited into this ISA. I haven't deposited any other amount throughout 2010 other than this £1. This means that between now and April, it is the only time I can fill the rest of my 2010 allowance?

If in April there is a higher rate ISA that only accepts new money, am I allowed to apply and open this ISA and deposit money into this? Am I right in thinking that in April the new allowance starts?

I'm asking because my ISA maturity date is Feb 2012 so does this mean that this ISA is my only ISA for the 2011 allowance since I have already put money in it? Or can I open another ISA?

Sorry if this is confusing! I've totally confused myself too.....:o

blueberrypie

The provider who insisted you deposit £1 should not have done so. The transferred funds should have been adequate for transferring your ISA. You may wish to contact the provider and complain about this.

Yes, in putting in that £1 you have "subscribed" to that ISA for the current tax year, and therefore you cannot open a new ISA in the current tax year, unless you transfer that £1 to the new ISA.

The tax year runs from April 6th to April 5th, so whatever happens in the 2010/11 tax year (i.e the one we're in now) becomes irrelevant after April 5th, as far as subscribing to ISAs is concerned. (I'm not sure why masonic mentions 4th/5th April - that hasn't been the end/beginning of the tax year since 1800!)

So from April 6th on, you can open a new ISA and put new funds into it (i.e. "subscribe" to it). Transferred funds are not considered part of your ISA allowance, so you can transfer any time (subject to the terms of your specific account).

masonic

blueberrypie wrote: »

The provider who insisted you deposit £1 should not have done so. The transferred funds should have been adequate for transferring your ISA. You may wish to contact the provider and complain about this.

I don't think there is anything to prevent an ISA provider insisting that an ISA is opened with new money. After all, some ISAs are offered for new money only and do not accept transfers at all. It's up to the ISA manager to decide on what terms they will accept a transfer. I don't think a complaint would be very productive.

Natwest used to be incapable of opening an ISA for transfers only (I don't know if that is still the case). They would insist on customers opening their accounts with £1, even if they were transferring in current years subscriptions. They also insisted on customers opening a separate bank account with them so that they could remove any "oversubscription" when the transfer was received. It's a very silly way of doing things, but it's clearly the result of their backward computer systems.

(I'm not sure why masonic mentions 4th/5th April - that hasn't been the end/beginning of the tax year since 1800!)

Oops, I'm not even sure how I mixed that one up!

blueberrypie

masonic wrote: »

I don't think there is anything to prevent an ISA provider insisting that an ISA is opened with new money. After all, some ISAs are offered for new money only and do not accept transfers at all. It's up to the ISA manager to decide on what terms they will accept a transfer. I don't think a complaint would be very productive.

I know there's nothing to stop them structuring an ISA in this way, but I don't think any of them actually do, do they?

That's why I suspect the OP was given inaccurate information, and it would be worth speaking to the provider again - there's probably no compensation due, given that he hadn't used his 10/11 ISA allowance anyway, but it might improve staff training.

Lokolo

OP - which bank?

masonic

blueberrypie wrote: »

I know there's nothing to stop them structuring an ISA in this way, but I don't think any of them actually do, do they?

There are ISAs that work like this. I opened one a couple of years ago. The account had to be opened in branch with a minumum of £1. Only then could you apply to transfer in an existing ISA.

tashalove

Opened with Halifax. I transferred my existing ISA on the same day and the girl said I had to go downstairs to the cash desk and deposit £1 also.

I never gave it too much thought at first but come to think of it, it shouldn't be an absolute requirement if I am only wanting to transfer my existing ISA over?

Nevertheless, it's done and there's no point in complaining. As long as I can deposit a new allowance in April in a possible 'new' ISA then that's fine.

Lokolo

You are not required to deposit £1 if you are with Halifax and the staff can override this by putting a "pretend" £1 in, which is then taken out when the transfer is complete.

But yes, you will be able to open a new ISA on April 6th. You can also topup the ISA you've transferred to until April 5th by a further £5,099... if you want, assuming you went for the Halifax Reward ISA (2.8%/3.0%)

tashalove

Lokolo wrote: »

You are not required to deposit £1 if you are with Halifax and the staff can override this by putting a "pretend" £1 in, which is then taken out when the transfer is complete.

But yes, you will be able to open a new ISA on April 6th. You can also topup the ISA you've transferred to until April 5th by a further £5,099... if you want, assuming you went for the Halifax Reward ISA (2.8%/3.0%)

That's good news. I was worried that the £1 subscription has tied me down for the 2011 allowance as well

rb10

Lokolo wrote: »

You are not required to deposit £1 if you are with Halifax and the staff can override this by putting a "pretend" £1 in, which is then taken out when the transfer is complete.

No.

The account is opened with a balance of £0. No money needs to be deposited, whether 'real' or 'pretend'.

Rogerb_2

If anyone can confirm my understanding I would be grateful.

I want to open a new Halifax cash ISA solely to transfer funds from an existing cash ISA with another provider. I have not paid new funds into this account to be transferred this tax year, which was opened before the start of the current tax year.

I have however opened another cash ISA for new funds this current tax year with a third provider.

Given that the new Halifax ISA would be for the transfer only of old investments prior to this tax year, I think this is allowed?

Any advice appreciated.