peps and isa's, urgent advice needed!!!!!!!

coys2006

Hi All, I'm a newbie in need of some urgent advice. When I bought my first home I took out a pep to repay the mortgage. I later changed the mortgage to repayment but continued to pay into the pep, which I am still doing. I had forgotten all about this and opened a cash isa a few years ago and also a stocks and shares isa.

I'm pretty sure I'm not allowed to do this, i.e have a pep and a stocks and shares isa as peps were changed to stocks and shares isas a few years ago?. My questions is what should I do next? do I close one of them or can I merge them without incurring a penalty?, and information or advice would be greatly appreciated.

many thanks

coys2006

snooping_around

...........

Mikeyorks

coys2006 wrote: »

Hi All, I'm a newbie in need of some urgent advice. When I bought my first home I took out a pep to repay the mortgage. I later changed the mortgage to repayment but continued to pay into the pep, which I am still doing. I had forgotten all about this and opened a cash isa a few years ago and also a stocks and shares isa.

Elaborate a little? What have you been paying into the 1) 'PEP' 2) cash ISA and 3) S&S ISA - on an annual basis?

coys2006

Mikeyorks wrote: »

Elaborate a little? What have you been paying into the 1) 'PEP' 2) cash ISA and 3) S&S ISA - on an annual basis?

Hi,

£600 annually into the pep for about 10 years

usually about 3k to 4k into cash isa and £900 annually into stocks and shares isa

coys2006

snooping_around wrote: »

You are allowed to have a peps and isa account at the same time. The only condition is that in any 1 tax year you should only have paid into 1 account

Hi, what happpens in my case where I have paid into 2 by mistake?

bigadaj

Peps were replaced by isas when they came in. The total amounts you are talking about are within allowances, so I would contact the pep provider initially and let them know. The underlying investment will be the same in or outside a pep or ISA, so this can be retained, but the charges may differ so worst case is they might retrospectively charge you a few per cent. You should then speak to hmrc if your provider hasn't notified them and explain the situation. The sums you are talking about should mean that cgt won't be a problem, but you might have not paid income tax on dividends and the like, again sums should be small. Hmrc could issue a penalty as well but probably best raising this now and seeing what they say.

coys2006

thanks for the info. My plan was to withdraw the money from the smaller stocks and shares isa and close it, then invest more per month into the pep.

Mikeyorks

coys2006 wrote: »

thanks for the info. My plan was to withdraw the money from the smaller stocks and shares isa and close it, then invest more per month into the pep.

I would go with your plan - other than leave the money in the S&S ISA if what you've bought with it is doing OK. But - obviously - don't add further funds whilst you're contributing to the 'PEP'.

As the sums involved are well under your overall ISA limit (£10680 this year) it's unlikely HMRC will take any action. At worst you will get a letter telling you not to do it again. I would not contact them. As you appear to have been doing this a while and remained under the parapet - just let sleeping dogs lie?