Have I just lost 4 years' worth of ISA allowance?

Mr_K

bigfreddiel wrote: »

Hmmm.... Mr K - you must have a different outlook on money to me - had my savings not been in an ISA I would have given HMRC £1000 this year, £800 last year, £700 the pevious year and so on - glad its in my pocket and not his!

No matter how much you have even when it starts small its vital not to waste a year - this poster has just wasted 4 years - £20k's worth - he could be keeping £200 a year right now but he wont be!

I was trying to cheer the OP up ! We haven't hear from him since he posted. From some of the posts on here he'll might have thrown himself off the nearest roof...

To put it in perspective, 4 years of ISA savings I'm guessing would be around around £20K. At 3% interest the amount of tax saved by being 'tax free' would be about £120 a year - worth having, but nothing life changing. (yes, I know interest rates could go up and there's a cumulative effect but don't tell the OP that, oops...)

GiraffeMan

From what I understand looking at the HMRC ISA guidance notes - point 10.31a - Cash withdrawn from an ISA in error by the investor cannot be reinstated.
Seems harsh but look at page 91 of the document linked below:


http://www.hmrc.gov.uk/isa/isa-guidance-notes-2008.pdf

ffacoffipawb

GiraffeMan wrote: »

From what I understand looking at the HMRC ISA guidance notes - point 10.31a - Cash withdrawn from an ISA in error by the investor cannot be reinstated.
Seems harsh but look at page 91 of the document linked below:


http://www.hmrc.gov.uk/isa/isa-guidance-notes-2008.pdf

That's unfair really. But if that's the rule, that's the rule!

TheMatrix_2

That might well be the case if it was a simple withdrawl of cash or transfer to a non isa account. But as the OP tried to do a online transfer from one isa to another isa, the OP could argue that he thought he was doing it correctly, even though he should have filled in a transfer form.

ultrawomble

Mr_K wrote: »

To put it in perspective, 4 years of ISA savings I'm guessing would be around around £20K. At 3% interest the amount of tax saved by being 'tax free' would be about £120 a year - worth having, but nothing life changing. (yes, I know interest rates could go up and there's a cumulative effect but don't tell the OP that, oops...)

Given that the OP managed to pay in 4 years of ISA subs into this year's allowance (£5,340) I would guess that they had never fulfilled their allowance for those years. As such, unless they can significantly more into it this year, they've not really lost any of the tax-free benefits.

le_loup

You seem to have missed this part of the original post!

woolyhat wrote: »

Today I got a letter from the Halifax saying they've treated the money as a new investment (even though I was transferring from another ISA account) and included a banker's draft for everything above the 2011/12 investment limit.

Stompa

ultrawomble wrote: »

Given that the OP managed to pay in 4 years of ISA subs into this year's allowance (£5,340) I would guess that they had never fulfilled their allowance for those years. As such, unless they can significantly more into it this year, they've not really lost any of the tax-free benefits.

That's clearly not the case, the OP says:

woolyhat wrote: »

Today I got a letter from the Halifax saying they've treated the money as a new investment (even though I was transferring from another ISA account) and included a banker's draft for everything above the 2011/12 investment limit.

Update: Beaten to it!

AirlieBird

GiraffeMan wrote: »

From what I understand looking at the HMRC ISA guidance notes - point 10.31a - Cash withdrawn from an ISA in error by the investor cannot be reinstated.

The OP did what HMRC calls a 'self-transfer'. Strictly speaking what the OP did was against the rules but there is a procedure that will allow the first 'self-transfer' to be repaired and the ISA designation to reapply.

I'm not sure whether this applies to the OP though, because the guidance only talks about current year subscriptions, and the original ISA must have been closed before any subscriptions to the new ISA were made.

ultrawomble

That'll teach me not to post too early in the morning.

GiraffeMan

AirlieBird wrote: »

The OP did what HMRC calls a 'self-transfer'. Strictly speaking what the OP did was against the rules but there is a procedure that will allow the first 'self-transfer' to be repaired and the ISA designation to reapply.

I'm not sure whether this applies to the OP though, because the guidance only talks about current year subscriptions, and the original ISA must have been closed before any subscriptions to the new ISA were made.

Then clearly they cant so give up accept a mistake and move on