Blocked ISA - Santander

spock999

Hi,

This is an old saga in some respects. ISA not used for a while and Santander say they have blocked it due to HMRC regulations.

I was told that I needed to complete an ISA declaration which essentially says that I want to subscribe to a Cash ISA for either 2010/2011 or 2011/2012. My problem is that I don't want to do that - I want to do the same thing with another provider. My feeling is that if I sign their form it would be illegal to make the same declaration to another provider.

However after extensive discussion they will not move and blame it all on HMRC. Is my interpretation of legality in this situation correct?

Baldur

spock999 wrote: »

Hi,

This is an old saga in some respects. ISA not used for a while and Santander say they have blocked it due to HMRC regulations.

I was told that I needed to complete an ISA declaration which essentially says that I want to subscribe to a Cash ISA for either 2010/2011 or 2011/2012. My problem is that I don't want to do that - I want to do the same thing with another provider. My feeling is that if I sign their form it would be illegal to make the same declaration to another provider.

However after extensive discussion they will not move and blame it all on HMRC. Is my interpretation of legality in this situation correct?

What are you saying?

Do you mean that Santander will not allow you to transfer your ISA out to a different provider, or that they won't allow you to pay new money into it?

If the latter, they are quite right, you would have to reactivate the ISA by submitting a new declaration. If the former, there is no need to make a declaration, which will be made to the new ISA provider to which you wish to transfer the ISA.

As you want to open a new Cash ISA for your 2011/12 allowance, you can't subscribe any of your 2011/12 allowance to the old ISA.

spock999

They say the account is blocked and that to unblock it I need to complete their ISA declaration.

The ISA transfer has not gone though yet so they have not yet prevented it. I am trying to preempt a problem but they just say I have to sign this declaration and that is the only thing that will reactivate the account.

I was expecting to have to identify myself to reactivate the account but not to have to sign a declaration that states I want an ISA for either of the 2 years I mentioned.

Baldur

spock999 wrote: »

They say the account is blocked and that to unblock it I need to complete their ISA declaration.

The ISA transfer has not gone though yet so they have not yet prevented it. I am trying to preempt a problem but they just say I have to sign this declaration and that is the only thing that will reactivate the account.

I was expecting to have to identify myself to reactivate the account but not to have to sign a declaration that states I want an ISA for either of the 2 years I mentioned.

If you are transferring the ISA, why are you dealing directly with Santander?

For an ISA transfer, you do not even approach Santander, you complete the chosen new provider's ISA transfer form and they then must arrange the transfer. If any declaration needs to be signed, it is the one contained in the new provider's ISA transfer form - nothing to do with Santander until they receive the ISA transfer form from the new provider.

Paul_Herring

spock999 wrote: »

I was expecting to have to identify myself to reactivate the account but not to have to sign a declaration that states I want an ISA for either of the 2 years I mentioned.

Reactivation is typically only needed if you intend to add further funds to that institution in the tax year, and you've not funded the account for at least a full tax year.

The declaration places no (extra) restriction on you with respect to any funds you do decide to subscribe to this year; it's akin to opening an account but not funding it; it doesn't prevent you from opening an account elsewhere and funding it, or not.

The only time an account counts as an 'open ISA' (in HMRC's eyes) is if you actually put additional money in it (transfers don't count.) Doesn't matter how many other unfunded accounts you have during the same tax year; as long as the current year's subscriptions are being held together in the same account.

lisab66

I'm new to this forum so forgive me for jumping in on this one but I've had trouble with Santander too. I opened a cash ISA with Alliance & Leicester in 2005. I have the original document with the declaration. Since then, I may have put money into it some years and others not but have never been asked to complete a new declaration. I timed an online transfer this year so that money would go into the now Santander account while I was abroad and before the tax deadline (I was waiting for some funds to clear). The money was returned i.e. not paid in and I missed the deadline. After an extensive telephone call with Santander, it was finally explained that it was because I needed to complete a new declaration and that it was nothing to do with them, but HMRC. Why have I never needed to complete a new declaration previously? Are they correct?

System

lisab66 wrote: »

I'm new to this forum so forgive me for jumping in on this one but I've had trouble with Santander too. I opened a cash ISA with Alliance & Leicester in 2005. I have the original document with the declaration. Since then, I may have put money into it some years and others not but have never been asked to complete a new declaration. I timed an online transfer this year so that money would go into the now Santander account while I was abroad and before the tax deadline (I was waiting for some funds to clear). The money was returned i.e. not paid in and I missed the deadline. After an extensive telephone call with Santander, it was finally explained that it was because I needed to complete a new declaration and that it was nothing to do with them, but HMRC. Why have I never needed to complete a new declaration previously? Are they correct?

You need to complete a new declaration if you did not pay any new money into the existing cash ISA during the previous year.

In the past, you may have paid in some money during each ISA tax year so that the ISA account remained active. But, if you miss paying in new money for one whole year, then the account becomes inactive and that is when a new declaration is required.

Santander are correct that this is part of the Cash ISA account rules.