Quick question: closing ISA

seriousDFW

I currently have no money in the ISA I have, as it was set up with some money I had given when I was 18 and that has all been spent now.

I am paying of debt at the moment and hope to be debt free by the end of 2012.

I want to tidy up my finances and close unnecessary accounts and so does it sound ok if I close my ISA completely and just apply for a new one next financial year after April? I've read it's best to transfer so you don't lose allowance but as I'm not saving anything this year presume this isn't a problem?

Just wanted to check before I close it.

Thanks.

atush

When was it opened? Will you have any reasonable chance of depositing money there B4 April 5th? Was it full before you took the money out?

bobthedambuilder

If you haven't got any money in the ISA, there's nothing available to transfer. You can't "replace" money you've withdrawn, and you can't transfer the allowance. Any money you put in this financial year counts against this year's allowance. You could put it into your existing ISA account, but you'll probably get a better introductory interest offer with a new account. Just close it.

seriousDFW

It was opened about 10 years ago and hasn't had anything in it for several years. I'm not planning on putting anything into it until about August.

Thanks.

seriousDFW

bobthedambuilder wrote: »

If you haven't got any money in the ISA, there's nothing available to transfer. You can't "replace" money you've withdrawn, and you can't transfer the allowance. Any money you put in this financial year counts against this year's allowance. You could put it into your existing ISA account, but you'll probably get a better introductory interest offer with a new account. Just close it.

Thanks, that's what I thought.

atush

You can't put new money in a ten yr old isa. If it is emply contact the bank abt closing it.

seriousDFW

atush wrote: »

You can't put new money in a ten yr old isa. If it is emply contact the bank abt closing it.

Really? I wasn't aware of that! I thought it was just like a normal account except tax didn't have to be paid on the allowance each year. I am aware that the allowance doesn't carry over for new money, but surely in this tax year I could put money into it, and not pay tax on the interest earned up to the allowance?

Is 10 years a limit? I've often put the odd hundred pound or so in there over the years, just to keep it separate (so haven't been bothered about interest).

atush

Each year you have to open a new acct to hold that years amt. Afterwards, older isas can be combined and transferred for better interest but a new year's contribs must always be into a new sep ISA.

CLAPTON

atush wrote: »

Each year you have to open a new acct to hold that years amt. Afterwards, older isas can be combined and transferred for better interest but a new year's contribs must always be into a new sep ISA.

I'm not sure what you mean

making a deposit in existing ISA in a new tax year is totally acceptable although if there is too long a break (in years) one need to apply again

Mikeyorks

seriousDFW wrote: »

..but surely in this tax year I could put money into it, and not pay tax on the interest earned up to the allowance?

If you don't pay into your ISA for a full tax year then it's not permitted to subscribe to it again without 're-opening' it with a further ISA application :

HMRC_guidance wrote:

Applications cease to be valid at the end of a tax year in which the investor fails to make a subscription. Where this happens, the investor must make a fresh application before subscriptions can re-commence.

If the ISA is empty then it is closed, as far as HMRC are concerned. But it does make sense to formalise that with the Bank by closing it with them.

rb10

atush wrote: »

Each year you have to open a new acct to hold that years amt. Afterwards, older isas can be combined and transferred for better interest but a new year's contribs must always be into a new sep ISA.

No, this is wrong.

In April, I would be permitted to add my new allowance into one of the ISAs that I already have open.