Cash ISA

dosh1

Confused so wonder if you can help?


I have x amount (say £5,000 for ease) of money in a CASH ISA account from a previous year's ISA saving.


I also have x amount (say £1,000 for ease) spare that I would like to invest in a CASH ISA account for 2015/6 entitlement.


Am I able to open an account for this year's entitlement and put in the £1000 I have spare (doesn't allow transfers)
AND
Transfer the existing CASH ISA money of £5000 to a DIFFERENT cash ISA account (if I chose to open a new one)?


Basically keeping both amounts of money separate but open two accounts. One for existing money and one for new 2015/16 ISA entitlement?


Thanks

TakeCareOfThePennies_2

No.

One ISA per person per annum. Them's the rules.

Or in the words of HMRC:

You can put money into one cash ISA and one stocks and shares ISA each tax year.

KGriff

Dosh1

Yes you can. Open up two cash ISA's and 'subscribe' to one by depositing your £1000 and you can continue to add further cash to that ISA upto £15,240 in total. That's this years annual subscription allowance.

You can then open a second ISA and make no deposits at all during the year and complete a transfer form and transfer in your old ISA (£5000). The transfer of monies is NOT counted as further subscription, so you are within your rights to do this. The transfer form you complete should be available from your NEW providers website. Check the terms and conditions of the ISA to ensure the provider allows transfers in, before you open the account.

However on opening some ISA's you maybe asked for a deposit of £1, to open the account, make sure you don't do this for the second ISA, I would suggest, if possible, speak to the provider first and explain it is simply your intention to transfer old funds in from a previous tax year rather than using it to subscribe and add more money. You should not have any problems.

Hope that helps.

jimjames

TakeCareOfThePennies wrote: »

No.

One ISA per person per annum. Them's the rules.

Or in the words of HMRC:

But the OP asked if they could put this year's money separately to last year's.

The answer to that is yes. Each year is separate and can be in a different account.

For £1000 you can do far better than a cash ISA though

KGriff

TakeCareOfThePennies wrote: »

No.

One ISA per person per annum. Them's the rules.

Or in the words of HMRC:

TakeCareOfThePennies

My understanding is 'subscribing' refers to depositing new money into an account, whereas transfers of old money from previous years are therefore allowed. This allows savers to seek out better rates for their old ISA's.

The only thing that may stop this happening is the terms and conditions of the account put in place by the provider.

I would therefore recommend that anyone wanting to do a 'transfer only' to an ISA, should speak to the new provider first.

Ballard

It is my understanding that you can only open one new cash ISA account per tax year so if you want to open a new one for the £1,000 you won't then be able to open a separate new one for the existing £5,000.

jimjames

Ballard wrote: »

It is my understanding that you can only open one new cash ISA account per tax year so if you want to open a new one for the £1,000 you won't then be able to open a separate new one for the existing £5,000.

No that's not correct.

You can do exactly that as kgriff has explained above.

KGriff

Ballard wrote: »

It is my understanding that you can only open one new cash ISA account per tax year so if you want to open a new one for the £1,000 you won't then be able to open a separate new one for the existing £5,000.

http://www.moneysavingexpert.com/savings/cash-isa-transfers#qa

See above link about ISA transfers.

Ballard

KGriff wrote: »

http://www.moneysavingexpert.com/savings/cash-isa-transfers#qa

See above link about ISA transfers.

Okay, thanks. I'd posted at roughly the same time and didn't mean to contradict. I wouldn't have posted had I read it first as I wasn't sure.

KGriff

Ballard,

No problem, it's not something that is clear in the ISA rules and regulations and I know people who work at the HMRC help desk and some providers are not sure themselves (depends on the member of staff you speak to). If there is a problem I would refer them to the link I gave above and hopefully that will resolve the matter.

However some providers (it appears) will claim it's not allowed within their terms and conditions as they insist an initial deposit is required. We cant always argue/negate the terms and conditions.

One other minor thing to say, as you open each ISA online it often asks during that process.... "have you subscribed to any other cash ISA in the current tax year' and some people have selected 'yes', but in reality their answer should be 'no' as the ISA that is holding just the transferred funds has not been subscribed to.

If they do select 'yes' then I assume the application process would be halted and you would need to go through filling in the application again. So make sure 'no' is selected for that particular question.

I think it would be easier if the chancellor were to ease off on regulation and allows people to have as many cash and shares ISA's as they choose so long as they do not deposit more than the annual allowance in new money. After all in the last Budget, George Osborne announced that we will be able to remove the allowance, or any part of it and be able to put it back in later in the same year, which we have never been able to do in the past.

So things are improving for these type of accounts.

TakeCareOfThePennies_2

KGriff wrote: »

My understanding is 'subscribing' refers to depositing new money into an account, whereas transfers of old money from previous years are therefore allowed. This allows savers to seek out better rates for their old ISA's.

Fair point KGriff, I missed the transfer in my original reading, and don't know off the top of my head how it affects things. My guess would be you're probably right, it would be a bit like transferring a SIPP to a different provider.