Paid into 2 cash ISAs by mistake

noelphobic

I've got a Nationwide Flexclusive ISA issue 4 and have paid £4690 into it in the current tax year. It had a balance of £8650 and I opened a Nationwide Flexclusive ISA issue 8 and transferred the whole amount over a couple of days ago.

The ISA doesn't accept transfers in so I did it as a transfer between accounts, in the same way as I would have done if I'd been transferring money from a current account to a savings account or vice versa.

I've just realised that I've broke the rules by paying into 2 cash ISAs in the same year, although I haven't exceeded the subscription limits - £4690 plus £8650 equalling less than 15k.

I don't intend to pay any more money into a cash ISA before 6th April, so that's not an issue. Just not sure what to do to correct my transgression. The original ISA is still open so should I just transfer the money back to there or do I need to contact HMRC and/or Nationwide?

masonic

You are allowed to split your allowance between the range of ISAs offered by Nationwide, so you have not broken any rules. Not all ISA providers allow you to do this, but Nationwide does.

noelphobic

masonic wrote: »

You are allowed to split your allowance between the range of ISAs offered by Nationwide, so you have not broken any rules. Not all ISA providers allow you to do this, but Nationwide does.

Thank you! Very relieved to hear that. I did notice that the new ISA shows that I've only paid £4690 in for this tax year, which confused me, but that could be why.

I did wonder why it when I logged into internet banking and looked at my accounts there was an offer there for the new ISA, but that would also be explained by your answer.

noelphobic

jimjames wrote: »

Not sure if I've understood your post correctly but have you only paid £4960 in this year and remainder is from previous years?

Transfers doesn't count against your allowance

Yes that's correct. The allowance doesn't matter in my case as I'm not intending to make any further deposits before 6th April.

enthusiasticsaver

As masonic says if they are both with Nationwide you are allowed to have two isas in the same tax year providing you do not exceed £15k contribution limit.

bigfreddiel

I'm not so sure this is okay as you mentioned the new isa doesn't allow transfers in. A
This rule may apply to other nationwide isa's so I would check that on Tuesday if I were you.

Let us all know the outcome please.

fj

masonic

bigfreddiel wrote: »

I'm not so sure this is okay as you mentioned the new isa doesn't allow transfers in. A
This rule may apply to other nationwide isa's so I would check that on Tuesday if I were you.

Essentially, the £8650 "transferred" (i.e. withdrawn and subscribed as new money) would count as new subscriptions and the £4690 added to the original ISA this tax year would be counted twice, but the total is still within the limits. It is no different as far as the rules are concerned than the OP opening the second ISA and subscribing £8650 of new money while leaving the original ISA untouched.

Alter_ego

For information for anyone who has actually subscribed to 2 by mistake, HMRC will eventually contact you saying they are going to cancel the second ISA and instruct the provider to refund you minus basic rate tax on the interest. They also tell you not to close one yourself.
( I did it )