Transferring ISAs - Can anyone confirm if this scenario is allowed?

innovate

westy22 wrote: »

I thought the green bit was the new 2013-14 money?

Yes, you are probably right, it's me not reading the diagram correctly

vacheron

westy22 wrote: »

I thought the green bit was the new 2013-14 money?

Correct.

The green bit is the £5,760 or whatever the 2013-14 allowance is which I used to open the new Barclays ISA.
The orangey bit is last years ISA I transferred in from NatWest.
The blue is the few quid I left in the old Barclays ISA years ago to keep it open.

See, I knew this diagram would come in handy!

Mikeyorks

vacheron wrote: »

Can anyone confirm if this scenario is prohibited/allowed under the current ISA rules?

I'm afraid Barclays are right and you can't currently contribute to the original 2010 ISA. Regrettably I suspect they don't know why they're right - hence the absence of both an explanation - and possibly a solution?

Assuming the '2010' ISA relates to 09-10 ........ then that became closed to subscriptions if you didn't contribute to it during the following year ie 10-11? And it seems fairly clear you didn't. All ISA applications 'lapse' in this manner if funds aren't added in subsequent years. Otherwise people could have 'open' ISAs all over the place. It's covered quite well at 4.1 of the HMRC guide to ISA Managers :

Investors must apply to subscribe to an ISA. Applications are valid for :
· subscriptions made in the year of application, and
· subscriptions made in each successive year following the year of application, in which the applicant subscribes to the ISA.
This allows, for example, a continuous subscription by direct debit or standing order, provided at least one payment is made in each tax year. The frequency, amount, and method of payment are matters for the ISA manager and the investor.

But para 4.2 equally offers the solution? Barclays don't have to offer it - as ISA Managers are at liberty to decline applications - but there's no reason for them to decline in this case? Only their ignorance of the entirety of the rules. They can simply allow you to complete a further application and what you are proposing is then OK. The rules where current year subscriptions and old years are co-located in the same ISA are such that you could transfer into the reopened 2010 year - provided you leave at least the £5760 behind. It's considered to be 'first in first out' ..... although not quite that simple!

4.2 Applications cease to be valid at the end of a tax year in which the investor fails to make a subscription. Where this happens, the investor must make a fresh application before subscriptions can re-commence.

Give Barclays a push ..... but I do suspect you may need to also kick a bit, as ignorance is endemic in Bank back offices. And I'm afraid the HMRC ISA help people are no longer the experts they used to be at helping out. But your £800 interest is a justifiable reason for pushing it all the way?

vacheron

Hi all.

Just thought I'd post an update that everything seems to be sorted.

It suddenly occurred to me that I get a free barclays premier manager who was supposed to be there for such things so I dropped her an e-mail.

After 3 attempts to explain and her getting the wrong end of the stick and insisting that it was not possible, I eventually recieved this reply:

Hi

---

I have spoken to our Isa department and it looks like you can transfer previous tax years allowances again ie back to the Cash isa

How much would you want to transfer and do you want to include the Golden Isa 3 in the offset arrangement ( that one is paying 2.2% interest )

---

So it took a bit of beling forthright and quoting the HMRC rules, but it looks like it was never a "real" problem in the first place.

Thanks to all for your input and allowing me to state the rules to them with confidence! :T

innovate

Glad to got it all sorted in the end, vacheron.

So disturbing that some bank personnel (across all banks/BSs) seem to be so badly informed on what is, after all, reasonably straight-forward rules.