Can you open more than one isa in the same isa tax year?

BBAGG1NS

Hi Fellow Savers,


I'm sure I'm not alone in being a tad confused about ISA rules regards new cash and transfers from previous years.


Can anyone give a definitive yes to this proposal:


1. Open a 2014/15 cash NISA for this years allowance and


2. Open a 2nd cash ISA in 2014/15 to accept transfers from previous years, as they mature, to achieve better rates?


Last year, Halifax wouldn't let me do this stating one can only open one cash ISA per year. Either Halifax or I, or both are confused!


Can anyone explain the rules?


Bilbo.

Archi_Bald

Yes you can do what you ask about.

You can open as many ISAs as you like, and anyone who tells you different hasn't got a clue, even if they work for a bank.

What you need to watch is where you deposit your allowance into. You must not pay into more than one cash ISA and more than one S&S each tax year. However, you can change your ISA provider whenever you like, incl in the same tax year.

Example of what you can do (in addition to the example you listed):

• on April 20 2014, you deposit £3,000 into a new instant access cash ISA with provider A
  .
• on July 20 2014, you see that provider B offers way better interest than provider A. You can ask provider B to transfer your entire ISA from provider A and then pay your remaining £15,000 into the ISA now held by provider B.
  
  If your ISA with provider A was a fixed term ISA, you would probably not have the same flexibility. Fixed term ones either don't allow any transfers/withdrawals before maturity at all, or they would levy prohibitive charges. Also, you would probably not be able to make further deposits into a fixed term ISA after a short deposit window has expired.

Aletank

Good question, which has me wondering about my situation but with stock n shares isa.
I have TradersOwn isa which I use to buy shares but I also have a Fundsmith account direct, which I pay monthly direct debit into.
Am I breaking the isa rules ? If so what will happen ?

Vortigern

Aletank wrote: »

I have TradersOwn isa which I use to buy shares but I also have a Fundsmith account direct, which I pay monthly direct debit into.
Am I breaking the isa rules ? If so what will happen ?

If you are paying monthly into a Fundsmith ISA, you are not allowed to put new money into your TradersOwn ISA. You can continue to trade within TradersOwn - i.e. sell some shares and use the proceeds to buy others.

HMRC will discover your transgression when the 2 ISA managers submit their returns. Apparently HMRC will then send a letter to say you've been naughty, don't do it again.

Aletank

Think I need to cancel my fundsmith direct debit & look Into a fund supermarket.
Thanks for the advice, hope hmrc do what you said !