Closing an ISA & paying into an ISA (same tax year)?

Nine_Lives

I know you can't subscribe to two ISAs in a tax year but i was wondering about this one...

My mum has a few £100 in an ISA which has had its rate slashed to 0.25%.
The highest paying ISA is Nationwide's 2.5% but doesn't allow transfers in.

She wont be paying in anywhere near to the limit, so withdrawing & paying in isn't an issue as far as that goes.

Could she withdraw from her current ISA (& close the account) and then pay into a new ISA, or is this not allowed?

Technically she'll have paid into 2 ISAs in the tax year, but one of them would've been closed, so i can see why it would & wouldn't be allowed.

molerat

No

If you change your mind after the end of that period (or the manager does not offer a cancellation or cooling off period), you cannot 'unwind' the transaction by closing the ISA. The payment made will still count as a subscription into an ISA and you may not put money into another ISA of the same type in that tax year. However, you could transfer the ISA to another ISA manager

http://www.hmrc.gov.uk/isa/faqs.htm#7

dtaylor84

Nine_Lives wrote: »

Technically she'll have paid into 2 ISAs in the tax year, but one of them would've been closed, so i can see why it would & wouldn't be allowed.

Has she actually added new money to old ISA since 06/04/2013?

If so, she can only pay into a different ISA if she transfers the existing ISA.

innovate

dtaylor84 wrote: »

If so, she can only pay into a different ISA if she transfers the existing ISA.

Yes, and the ISA she transfers to can be as per molerat's link. There might be charges involved, however.

rearrange: box outside think the