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ISA New Tax Year
Comments
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I have seen some suggestions that HMRC may be liberal on this point i.e. overlooking that you have a help to buy and a cash isa open and invested in in one year providing you don’t exceed the ISA investment limits in total. It really would have made much more sense to treat help to buy ISAs as a separate class from cash ISAs – as with stocks and shares and the new innovative finance (peer to peer ISAs) – to avoid this problem. Go on George – change the rules!
I expect there will be loads of people caught out i.e. opening help to buy and cash isas that they may well be flexible – particularly given the new £1k tax free savings limit which remove the benefit for most people of the tax free benefit for cash holdings.
Not that I would recommend this – merely that I expect they may well be flexible and not penalise people for doing this.0 -
MarmiteIndifferential wrote: »If I had a cash ISA from a previous tax year, would I be able to open up a HTB ISA in the next tax year and pay into both at the same?
No the rule is that you can only pay into one cash ISA in any one tax year. There are some exceptions within the same provider ( N/Wide I think)I am not a cat (But my friend is)0 -
I don't think it's so much George's rules but more the capability of the ISA provider's systems.Go on George – change the rules!
As has been discussed, if you desperately want to pay into both, and HTB and a normal cash ISA, you can do this at several providers (Nationwide, Natwest, Virgin etc). But the big question is why any prospective First Time Buyer would want to pay into a normal ISA. I still fail to see any valid reason.0 -
But the big question is why any prospective First Time Buyer would want to pay into a normal ISA. I still fail to see any valid reason.
...given that you already saved up to 1K in interest for next year:
Both of them are tax free
HTBs have far better rates than traditional ISAs
HTBs have very small allowance (3,4K p/a)0 -
I don't think it's so much George's rules but more the capability of the ISA provider's systems.
As has been discussed, if you desperately want to pay into both, and HTB and a normal cash ISA, you can do this at several providers (Nationwide, Natwest, Virgin etc). But the big question is why any prospective First Time Buyer would want to pay into a normal ISA. I still fail to see any valid reason.
They seem to manage to cope with the totally different terms and conditions for help to buy isas - surely it couldn't be that hard to separately classify them for HMRC?
Maybe someone could think of savers - it would make things a lot simpler all round.
We can keep saying there are alternatives but people will still keep opening cash isas and probably HTBs as well.0 -
...given that you already saved up to 1K in interest for next year:
Both of them are tax free
HTBs have far better rates than traditional ISAs
HTBs have very small allowance (3,4K p/a)
Nobody questions an HTB ISA. But it is very hard to understand why a prospective FTB would want to save in a normal cash ISA. What would you rather get - 1.5% tax free, 5% or 6% taxable? With the forthcoming Personal Savings Allowance, the benefits of a normal cash ISA are really vanishingly small, to the point of being non-existent.0 -
Nobody questions an HTB ISA. But it is very hard to understand why a prospective FTB would want to save in a normal cash ISA. What would you rather get - 1.5% tax free, 5% or 6% taxable? With the forthcoming Personal Savings Allowance, the benefits of a normal cash ISA are really vanishingly small, to the point of being non-existent.
Totally agree , form 6th April I can't see how it is advantageous to have any of the mainstream cash ISA's - much better off with Santander , Lloyds current accounts etc0 -
...given that you already saved up to 1K in interest for next year:
Both of them are tax free
HTBs have far better rates than traditional ISAs
HTBs have very small allowance (3,4K p/a)
You seem to be falling into the trap that getting something tax free is preferable to paying tax. It's not if paying tax gives a higher return.Remember the saying: if it looks too good to be true it almost certainly is.0 -
You seem to be falling into the trap that getting something tax free is preferable to paying tax. It's not if paying tax gives a higher return.
I do partially agree.
Let's say you have 20k in a cash ISA @1,5% it equates to 300£ intrest p/a.
Lets's assume that you move this 20k to a Santander 123 and you have to pay basic income taxes.
After taxes and fees you will have a return of £420 (20k @2,4%= 480 -£60).
The final difference it's only £120 and (in my opinion, thinking on a longer term) ISAs are still worthed.0 -
I do partially agree.
Let's say you have 20k in a cash ISA @1,5% it equates to 300£ intrest p/a.
Lets's assume that you move this 20k to a Santander 123 and you have to pay basic income taxes.
After taxes and fees you will have a return of £420 (20k @2,4%= 480 -£60).
The final difference it's only £120 and (in my opinion, thinking on a longer term) ISAs are still worthed.
A 40% greater return is not worth it? Is that what you are saying?0
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