New ISA issues...Please help!

amyfennelly

Hi everyone,

I wonder if anyone can help. I opened a Fixed Rate 3% ISA with Halifax on 02/04/13 just in time for the end of the tax year. I was under the impression that because I opened it in the 2013/2013 tax year that I would be able to open another ISA in the forthcoming 2013/2014 tax year or at least make another contribution of £5760 tax free interest, however I was told neither of these were possible by the guy who opened my account.

I have a 60 day period in which I can add funds into this Fixed Rate ISA, and after that I am unable to add or withdraw any funds until it matures. I do plan to add more funds into the account during this short period. Is it because the 60 day period carries me over into the new tax year that I cannot open another ISA? Despite the date of opening the ISA is in the current tax year? Or have I been given incorrect information?

Any replies would be of great help, I am a little confused!

Thanks.

chris_m

You cannot contribute new funds to more than one ISA in the same tax year.

Therefore today (or is it tomorrow? Does the year end or start on April 6th?) is the last day on which you can add funds to your ISA without restricting yourself from opening another ISA in the 2013-14 tax year.

If you use your 60-day window (after today/tomorrow) to add to the ISA you've just opened you will not be able to open another ISA until 2014-15.

psychic_teabag

It sounds to me like you are right and the Halifax guy was wrong. You'd probably best double-check with Halifax.

The only way I could see how you could not be allowed a new ISA next week would be if the funds you paid in are intended for use next week rather than this week. (Some providers allow you to give them the money early, and they hold it in a non ISA until the calendar ticks over. I guess this is done so that you can put two years subscription into one account at the same time.) Or, I dunno, if you paid by cheque and they wouldn't open the account until it had cleared, or something.

You probably have rights to cancel the account if they have done something weird, but unfortunately that wouldn't leave you much time to get another account opened for 2012/2013.

innovate

You must deposit your 2012-13 contribution today, and they need to credit it to your account today. Tomorrow is a new tax year.

debs626

Sorry to hijack your thread

I'm a complete noob to ISA's and upon seeing martin's show last night I quickly opened one and deposited £100 in it ....... this morning its £100.01 didnt know that I could have put the max in and get interest over night or I would have done

Anyway am I right in thinking I can now open another ? can I still pay into the first one and earn interest on it ?

Thanks in advance for any info or advice

rb10

debs626 wrote: »

I'm a complete noob to ISA's and upon seeing martin's show last night I quickly opened one and deposited £100 in it ....... this morning its £100.01 didnt know that I could have put the max in and get interest over night or I would have done

You get interest for every day that the money is in the account. You had £100 in the account for one day, so you get one day's worth of interest on £100.

debs626 wrote: »

Anyway am I right in thinking I can now open another ? can I still pay into the first one and earn interest on it ?

You can either open a new ISA, or add your 2013/14 allowance into the existing ISA.

Hele_an

Quick one - i have just opened a new isa today and I have asked them to transfer over money from an existing under performing isa which was opened 8 years ago.

However my Isa that I opened last year (2012/2013) I wish to keep adding to as the rate is good. Is my ISA allowance now spread between the two isas I wish to contribute too? I have been adding to my good isa and my bad isa for the last 12 months and while I am probably well off my max allowance I was unaware that this may be an issue?

Any clarification would be great!

rb10

Hele_an wrote: »

Quick one - i have just opened a new isa today and I have asked them to transfer over money from an existing under performing isa which was opened 8 years ago.

However my Isa that I opened last year (2012/2013) I wish to keep adding to as the rate is good. Is my ISA allowance now spread between the two isas I wish to contribute too? I have been adding to my good isa and my bad isa for the last 12 months and while I am probably well off my max allowance I was unaware that this may be an issue?

Any clarification would be great!

You may get a letter from HMRC explaining that what you have done isn't permitted. However, if it's your first time breaking the rules, they are likely to let you off the hook.

You have an annual ISA allowance, this year the cash ISA allowance is £5,740. This only applies to new money - you can do ISA transfers (of existing ISAs) whenever you like.

Your allowance has to go into either:

• All into just one account; or
• If you hold more than one Nationwide ISA, you can split your allowance between different Nationwide ISAs

The final slight complication is that if you put, say, £2k into a Halifax ISA, and then transfer this whole ISA to (say) Santander, you can then add a further £3,740 to the Santander ISA. This (where you transfer an ISA during the year) is the only time where you can split your allowance between different providers.

Hele_an

That's really interesting. The ISA I opened today is my fourth. I have one Nationwide one which I opened 12 years ago and which I transferred to a Virgin Money ISA last year and a Smile one which I have just asked to be transferred to the one opened today.

Since I opened the Smile ISA 8 years ago I have always added money into both ISAs that were open - never had a letter from HRMC and no one has ever told me not to do this. I have never added the full amount in one go though - always small amounts as and when i had the money to do so and there are regular withdrawals too (at least from one). I'm surprised if i'm the only one getting away this then?

david78

It is against the rules. HMRC have had a policy for a number of years of turning a blind eye to this, but only for first offenders. Best advice really is to stop doing it.

You may get a letter from them at some point giving you a "ticking off" and asking you to stop being so "naughty".

I am not sure why you have escaped so far.

rb10

Hele_an wrote: »

That's really interesting. The ISA I opened today is my fourth. I have one Nationwide one which I opened 12 years ago and which I transferred to a Virgin Money ISA last year and a Smile one which I have just asked to be transferred to the one opened today.

Since I opened the Smile ISA 8 years ago I have always added money into both ISAs that were open - never had a letter from HRMC and no one has ever told me not to do this. I have never added the full amount in one go though - always small amounts as and when i had the money to do so and there are regular withdrawals too (at least from one). I'm surprised if i'm the only one getting away this then?

That is surprising. They will no doubt catch up with you in due course.