Can I make my Maxi a Mini??

littlesos

Hi,
I'm a bit thick at all this money stuff so I need some help/advice please.

Years and years ago I set-up a maxi isa with First direct. I initially paid £100 monthly into the shares part and saved some cash in the cash part. I withdrew the cash ages ago and it's been empty ever since. I've kept the shares part going.

Now I have some spare cash again I would like to make use of a cash isa. I spoke to First Direct but all they can offer is re-opening my old one which is a rubbish rate. Does anyone know if I can open a new cash isa somewhere else, or does the fact I have a "maxi" isa already mean I'm stuck?

Thanks

Aegis

Assuming you haven't paid in to your maxi ISA this tax year, you could open up a mini cash ISA elsewhere. However, I think you can only pay into either a Maxi ISA or 2 mini ISAs (one cash, one stocks and shares) each year, so if your monthly payments are still going through you might be a little stuck!

Fortunately there are still options. You should be able to transfer to a different Maxi ISA (i.e. with another provider) if you can find a better rate, and if you can't then the best bet might be to invest the cash into a savings account until the end of the year (if it gets better rates than the ISA, otherwise stick with the cash part of your Maxi ISA) then transfer next year when ISAs are going to change format completely. At least that way you get the tax free benefit for your money, allowing you to keep next year's allowance free for any other depositing needs!

Ximian

Not at all.
The important things to remember about ISA's are:

You can't have a Maxi AND and Mini ISA in the same Tax year.
The important number to remember is £7000 - this applies to the Maxi and Mini ISA, this is the maximum allowance that you can invest per tax year.
The maximum cash amount is £3000 per tax year - this is what can be allocated for your cash ISA.
You can allocate the full £7000 in stocks and shares this will be a Maxi ISA.
With a Mini ISA you can use separate companies for your ISA allowance - for example one company for cash ISA and another company for the S&S component.

HTH

littlesos

Thanks

I have made payments into the shares part of my ISA this tax year, and I'm quite happy with how it's performing, so I don't really want to change that part.

So if I understand correctly the best thing for me to do would be to change the shares part to a mini isa, and then get a mini cash isa somewhere else, but I would have to wait till next year to do this.

Thanks again

Littlesos

debbie42

littlesos wrote: »

I have made payments into the shares part of my ISA this tax year, and I'm quite happy with how it's performing, so I don't really want to change that part.

So if I understand correctly the best thing for me to do would be to change the shares part to a mini isa, and then get a mini cash isa somewhere else, but I would have to wait till next year to do this.

Your ISA allowance is for each tax year: contributions made in previous years don't count towards curtrent allowances. So, in your case, if you have contributed to a maxi ISA for this year, and you are happy with it for next year, you can just leave it as it is. You don't have to change it to a mini at all. As of next tax year you will have a completely new allowance that you can do what you want with, regardless of any existing ISAs.

Aegis

Can someone change a Maxi ISA into a Mini one under the current regulations then? I was under the impression that if you put money into a maxi ISA in any given tax year, you couldn't open or deposit ANY money into a mini ISA. That's why I gave the advice I did. Am I wrong, in which case my advice should be ignored, or am I right, in which case the OP has to stick with a maxi ISA for this year and has somewhat more freedom next year?

dunstonh

Can someone change a Maxi ISA into a Mini one under the current regulations then?

No. Not during the tax year.

The minute you pay money in during this tax year you are committed to MINI or MAXI depending on which it is. You can change future tax years by notifying the provider around Feb time to change from MAXI to MINI (or vice versa) but you cannot change mid year.

littlesos

debbie42 wrote: »

You don't have to change it to a mini at all. As of next tax year you will have a completely new allowance that you can do what you want with, regardless of any existing ISAs.

My problem is I want to keep paying into the shares part in future years. I think the only way I can do this is to convert the maxi to a mini shares isa and then take out a new cash isa. I thought the rules aren't changing till next tax year, so I can't convert maxi to mini now.

As the rules are now, I can't open a mini cash isa as I already have a maxi, even though the cash part is empty. Is this statement correct?

Thanks

jem16

littlesos wrote: »

As the rules are now, I can't open a mini cash isa as I already have a maxi, even though the cash part is empty. Is this statement correct?

Thanks

That is correct - you have committed to the Maxi ISA for this tax year.

As from April 2008 the distinction of MAXI and MINI vanishes and it just becomes a Cash ISA or S&S ISA. This will mean that you will simply have an allowance of £7200 and it's up to you how to use it as long as no more than £3600 goes into the cash ISA. So you could have £3600 in each part or £6000 in S&S and £1200 in cash.

Aegis

dunstonh wrote: »

No. Not during the tax year.

The minute you pay money in during this tax year you are committed to MINI or MAXI depending on which it is. You can change future tax years but notifying the provider around Feb time to change from MAXI to MINI (or vice versa) but you cannot change mid year.

Thanks, that's pretty much what I thought!