ISA Advice

kevin63

So i'm aware the ISA deadline is coming up soon (Beginning of april) and I have abit of a dilemma.

I have just sold a property and so have some surplus cash. I'm hoping to fill one ISA this month, then come April fill another. This is possible, right?

The issue I have however, i have a dormant ISA from 07/08/2012. It's currently sitting in my Santander account and I havn't deposited cash since 12/02/2013. Does this mean i'm stuck with this ISA for this year, or would that fall under 12/13? I emptied the ISA on 03/07/13 (withdrew all cash) and havn't used it since. Last time cash went in was interest on 07/08/2013 (I withdrew it as soon as I noticed it) and more recently 03/03/2014 - This most recent one was for a mere 1p and i've left it in the account ever since.

I'm looking to cancel this ISA, open an ISA for this year with the best rate and then do the same this april for the next ISA year. I'm just not sure if i'm actually tied into this ISA for this year you see.

Advice would be appreciated!

eskbanker

Forget the dormant one (no need to cancel it as such, although not much point in retaining it), the rule is you can only subscribe (pay new money in) to one cash ISA in any given year. So, as you haven't paid anything in to any ISA in 2013-14 you still have your whole £5,760 annual allowance and free reign of where to go, and then the same again after 6 April.

xylophone

The current tax year is 6 Apr 2013 - 5 Apr 2014.

You have not subscribed to an ISA in the current tax year? (The interest paid on the ISA you opened in the tax year 2012-13 does not count as a subscription.)

If this is the case then you can subscribe up to the full amount to an ISA in the current tax year and up to the full amount in the next tax year 6 Apr 2014 - 5 Apr 2015.

jimjames

If the surplus cash is more than will fit in an ISA and you may want it short term then there are plenty of options outside an ISA that pay substantially more interest than ISAs do so an ISA isn't the automatic best option.

Wammer

kevin63 wrote: »

I emptied the ISA on 03/07/13 (withdrew all cash) and havn't used it since.

You should never withdraw cash from an ISA, unless you need it of course, if you want to retain the tax free status. If you wanted to continue saving the money in it, you could transfer it to another ISA paying a better rate.

kevin63

Thanks for all the advice chaps. I might just call santander and get them to cancel it then and open a new one with the best rate i can find (Probably use this website)

Wammer wrote: »

You should never withdraw cash from an ISA, unless you need it of course, if you want to retain the tax free status. If you wanted to continue saving the money in it, you could transfer it to another ISA paying a better rate.

The reason I had the ISA was to save up for deposit on house. I withdraw the cash for the deposit on the house.

As for is ISA the best option here - I'm looking at around 7k so not alot, but enough to fill one and start another for next ISA year. If you have better options though, i'm all ears!