Pay into Two ISA's

mutley*1_2

Hi,

I have two cash mini ISA's. I paid £500 into one and then wanted to pay £2500 into the other in Feb of the same tax year. I asked the guy at the counter if this was OK as long as I had paid less than £3000 in total in the tax year and he said yes and I paid the £2500 in.

I have just received a letter from my bank saying "my account has been identified as one in which money has been paid in the this tax year, but not in the previous tax year" which is true, although this seemed a bit strange, I have to sign and return it.

I have then had a quick look about the web and it would seem that I cant pay into two ISA in the same tax year, even if I pay in less than the £3000 limit, could someone confirm this for me?

So it now seems I have done the wrong thing on the advice of the teller so could someone advise me as what to do now to remedy the situation? I would rather find out the best procedure before contacting the bank.

Also can I pay into each ISA in alternative tax years or once a new ISA is open, can I only use that?

Thanks for any advice.

gelato_cat

mutley*1 wrote:

I have two cash mini ISA's. I paid £500 into one and then wanted to pay £2500 into the other in Feb of the same tax year. I asked the guy at the counter if this was OK as long as I had paid less than £3000 in total in the tax year and he said yes and I paid the £2500 in.

I hate dealing with people at banks - none of them seem to know what they're talking about :mad:

mutley*1 wrote:

I have then had a quick look about the web and it would seem that I cant pay into two ISA in the same tax year, even if I pay in less than the £3000 limit, could someone confirm this for me?

Correct. You may not invest in more than one mini ISA in the same tax year even if the total investments are equal to or less than £3k.

mutley*1 wrote:

So it now seems I have done the wrong thing on the advice of the teller so could someone advise me as what to do now to remedy the situation? I would rather find out the best procedure before contacting the bank.

Are both ISAs with the same bank? I would write them a letter explaining that you received the wrong advice from the teller and instruct them to put all the money into one of the ISAs.

mutley*1 wrote:

Also can I pay into each ISA in alternative tax years

Yes, as long as you are only depositing into one of them each year and depending on the T&C of the provider.

mutley*1 wrote:

or once a new ISA is open, can I only use that?

You can open one ISA per tax year or just open one and stick with it.

HTH

Suze

Ian_W

From
https://www.hmrc.gov.uk/leaflets/isa-factsheet.htm

Mistakes do happen. If you do invest in more than one ISA in a tax year, the second ISA will not be tax-free.
If this has happened call our ISA helpline. Have the details of your ISA accounts to hand when you call.

Which did you pay into first? That appears to be your actual active ISA from the factsheet so as we're getting close to the end of the tax year I'd make sure your £3K is in that one. If it's not competitive you can transfer it to another provider using the transfer procedure - see ISA FAQs at the top of the board.
Using different ISAs in different tax years is fine it's paying into different ones in the same tax year that's problematic.
You can complain to the bank that the advice given wasn't correct and ask them to make up any lost interest but that isn't going to be mega I wouldn't have thought so it's perhaps more important to make sure you get the max in your "proper" ISA before you lose the allowance at the tax year end.

mutley*1_2

Are both ISAs with the same bank? I would write them a letter explaining that you received the wrong advice from the teller and instruct them to put all the money into one of the ISAs.

No they are with different banks which kind of complicates things, the only reason for this was to keep some money separated.

Which did you pay into first?

I paid the £500 in in the summer 06 and the £2500 in Jan/Feb 07 as I wanted it in before the end of the tax year. If I lose 2/3 months interest on the £2500 I'm not too bothered as long as its in for this tax year thats fine as I want to add more come the new tax year.

I will phone the helpline number and see what they say.

Cheers folks.

dunstonh

The second one will become void and any money in it will be returned to you. It may take the HMRC upto a year to notify you but you may as well tell the second bank now what happened.

You should then top up the first one before the end of the tax year.