one ISA per year rule

glocal

I have an ISA (ISA1) I haven't yet put money into in 2014/15. Rather than growing that this year, I am thinking of creating a separate ISA with another bank (ISA2) for regular deposits. I am not sure about the 'one ISA per year' rule.

Will I be able to move ISA1 and ISA2 to other banks later in 2014/15 if I wish?

Will I be able to add ISA2 to the bigger ISA1 in 2014/15? ISA1 may have moved to another bank in the meanwhile.

Many thanks

Lansdowne

Sec

glocal wrote: »

Will I be able to move ISA1 and ISA2 to other banks later in 2014/15 if I wish?

Will I be able to add ISA2 to the bigger ISA1 in 2014/15? ISA1 may have moved to another bank in the meanwhile.

Many thanks

First question, Yes.
Second question, Yes as long as ISA1 bank's rules allow it. So if you plan to move ISA1, make sure it will allow a later transfer in.

soulsaver

The rule is '...cant contribute to more than one ...'

glocal

So, 'contributing' means depositing new, non-ISA money, but unlimited moving and merging ISAs in any year are allowed (assuming that the banks offer the necessary products).

If you can only contribute to one ISA in a given year, does this mean that when you make the first small payment into a regular saver ISA (ISA2) you can't make payments to another ISA (ISA1) you may already have? If later in the year you add ISA2 to ISA1 before you deposit the full amount allowed for the year, then ISA2 disappears, and with it your ability to use all your allowance. Is that correct?

innovate

You can contribute to two ISAs each financial year - a S&S one and a cash one. You can transfer from cash to S&S, and from July 1 also from S&S to cash.

You can also change provider as often as you like, including within the same financial year. Though in reality you probably wouldn't change your S&S provider very often, and better cash ISA deals rarely come along during a financial year, and if they do, they invariably do not allow transfers in. Some cash ISAs are also fixed term and cannot be accessed, even for transfer, early, or they have stiff penalties for doing so.

All transfers do not affect your current year's ISA allowance. Only deposits of new money do.

In the same financial year, you cannot put money into a any ISA1, and then also put money into any ISA2 of the same type (cash or S&S). It does not matter how small or otherwise your contributions are, and it does not matter in which year you opened the ISAs. As soon as you put money into one ISA of a type, that will be your only ISA of that type that you can put further money into (obviously paying regard to the allowance limits).

As above, you are able to change provider for the S&S and the cash ISA you have put money into. You must transfer your current year's contributions to the transferred ISA in full.

If your provider allows transfers in, you will also be able to transfer in ISAs from previous years, either in part or in full.

It is all very simple, really.

EDIT: reminded by another poster in another thread that there are some cash ISA provider that allow you to contribute to several ISA accounts with them in the same financial year. Examples include Nationwide and Newcastle Building Societies. Again, I think this would be rarely used, since it would mean the provider launches a better rate ISA with no transfers-in in the same year.

soulsaver

glocal wrote: »

So, 'contributing' means depositing new, non-ISA money, but unlimited moving and merging ISAs in any year are allowed (assuming that the banks offer the necessary products).

Correct.

glocal wrote: »

If you can only contribute to one ISA in a given year, does this mean that when you make the first small payment into a regular saver ISA (ISA2) you can't make payments to another ISA (ISA1) you may already have?

Correct (we are talking Cash ISA here - not Stocks & Shares).

glocal wrote: »

If later in the year you add ISA2 to ISA1 before you deposit the full amount allowed for the year, then ISA2 disappears, and with it your ability to use all your allowance. Is that correct?

No, if understand you:
Assuming ISA2 in your example is an earlier year ISA, that is accepted by the provider as 'transfer in' to this years ISA product (ISA1) then you can legitimately contribute the balance of this years allowance to ISA1, assuming the provider allows it.

If you've got 2 cash ISAs opened & contributing in this financial year talk to the provider(s) about how you resolve the issue.
They may say you have to talk to HMRC; but if it's the same provider with 2 products, they may handle it.