ISA question

curtis122

I understand that you can only pay into one active cash ISA in a year at one time.

If for example though I open a cash ISA now and pay in some money and then a better rated ISA turns up in a months time can I open that one and then transfer the current one into it and continue to pay up to the new limit for this year then maybe do the same if another better one comes out later on or is it a case of I can only start paying into one and have to keep that one till the next FY year until I can get a new one?

j0nathon2

Yes, oOpen a new ISA and Transfer in your existing ISA and then continue to contribute up to the annual allowance.

matttye

http://www.isa.co.uk/isa-knowledge-base/how-many-isas-can-you-have.aspx

"Individuals cannot open more than one of each type of account each year. If you err and open more than one cash or shares ISA in a single tax year, it is important to notify your fund manager or bank right away. In some cases, the ISA may be allowed to remain open, once you have consulted with HM Revenue and Customs. However, it is important to have an expert in the field make that determination to ensure you do not receive any penalties for violating the ISA rules."

I had two ISAs last year but the bank told me not to worry as I've never paid any money into one of them.

MoneySaverLog

Yes as long as the new isa will allow you to transfer in, you'll have to transfer all that you've paid in during the current tax year. Watch for any penalties doing transfers early though.

Yorkie1

Yes, you can do what you propose. You can only open and fund one ISA per tax year. Transferring an ISA doesn't count as opening and funding a new ISA - it's the same one all along, just with a different provider's name on it.