What's the meaning of "voiding and repair of ISA"?

mickael28

Hello,

I was comparing the costs of a few stocks and shares ISAs and some of them have the following charges that I don't really understand.

• Voiding of ISA - £65 (plus VAT)
• Repair of ISA - £65 (plus VAT)

What's their meaning? Do you know when would you incur them?

dtaylor84

HMRC define voiding and repair in the ISA Guidance Notes (for ISA managers) here: http://www.hmrc.gov.uk/isa/isa-guidance-notes.pdf

Typically it would mean you have put too much money in an ISA, or subscribed to multiple ISAs in one tax year.

innovate

Bit of googling reveals:

An ISA can be cancelled, or in HMRC terms made 'void', if there has been a breach of the ISA regulations. An example would be if an investor has subscribed to more than one Stocks & Shares ISA in the same tax year. In this case, the second ISA would be made void.

As to 'repair', there seems to be a lot of complicated stuff to consider. But all comes down to mistakes made byt the investor. http://www.hmrc.gov.uk/ria/isa_voiding.pdf

I should say the easiest way to avoid the "void" and/or "repair" charges is to generally stick to the ISA rules for annual new deposits, and not to attempt to carry out a transfer yourself.

mickael28

Thank you guys! I couldn't find that information myself.

Basically what you explained, and the HMRC rules say:

An ISA may be found to be invalid. For example, it may be invalid because the
investments held in the account are non-qualifying, or the investor is not a
qualifying individual, or the subscription to the account is invalid. Invalid accounts
can, in certain circumstances, continue as ISAs after corrective action, or ‘repair’.
Invalid accounts that cannot be repaired must be voided.

Understood now, many thanks!!