Cash temporarily held in S&S ISA

Legacy_user

I understand that cash can be held temporarily in S&S ISA a/c such as iii, for example following a sale of one stock and the purchase of another.
The same must also be true when cash is added to the ISA.

But is there a regulation limit of how long cash can be held before it compromises the status of the ISA? Supposing I topped up a S&S ISA today but didn't spend it all by 5 April - would that still count against this year's limit, or next?

grey_gym_sock

there's no stated maximum time. but a few weeks wouldn't be regarded as a long time.

if you do stay in cash for too long, it doesn't change which year the subscriptions come under. apparently, they can ask you nicely to invest the cash. presumably, if you didn't, they could insist the cash is taken out of the ISA wrapper.

ColdIron

I often park temporary cash in the Fidelity Moneybuilder Income (Acc) fund, it's pretty stable and has low-ish annual charges. I just don't like cash sitting there doing nothing

Vortigern

grey_gym_sock wrote: »

there's no stated maximum time. but a few weeks wouldn't be regarded as a long time.

if you do stay in cash for too long, it doesn't change which year the subscriptions come under. apparently, they can ask you nicely to invest the cash. presumably, if you didn't, they could insist the cash is taken out of the ISA wrapper.

Who is "they"? HMRC or the ISA provider?

grey_gym_sock

Vortigern wrote: »

Who is "they"? HMRC or the ISA provider?

i think HMRC, but i'm not sure, as this is third-hand info.

lisyloo

I'm pretty sure my portfolio always has a % in cash.
It's never caused me problem with my ISA.

grey_gym_sock

if it's only a small %, there may in practice not be any time limit. i haven't done this with ISAs, but i had a PEP which had a small % in cash for a number of years.

badger09

I've just asked this very question online to Hargreaves Lansdown.

I'm considering opening an S&S ISA with them for 2012/13 them but haven't decided which Fund (probably VLS 80% or 60%) to invest in. Paralysis of analysis has set in :eek:

I was told that HL don't specify a time limit, but HMRC limit is 6 months for cash to be invested. I assume there are de minimis limits but did not ask that question.

I was so impressed with HL service to a non customer that I'm going to open an account now. That should provide the impetus to stop analysing and DO SOMETHING

System

Many thanks everyone. That appears to answer the question very satisfactorily.

It's surprising that it isn't more publicised. There are often press articles urging people to use up their ISA limit as the 5 April dawns, but never one that says get the money in quick and then pick the investments at leisure.

dunstonh

Cash is taxed in an ISA and HMRC no longer care about timescale. Indeed, with unbundled platforms, it is normal to permanently hold a certain amount in cash.

badger09

dunstonh wrote: »

Cash is taxed in an ISA and HMRC no longer care about timescale. Indeed, with unbundled platforms, it is normal to permanently hold a certain amount in cash.

That's very interesting, thanks.

So there's no pressure to choose specific investments, as long as the subscription reaches the S&S ISA account before 5 April.