Real ISA Muddle!

Dave2012_2

Help!

In some of my other posts i've been bemoaning Abbey and their postal ISA delays - so much so that 5 weeks after sending an application to transfer from Safeway to Abbey Postal, I rang them and they said they had no details of me and that my application was lost in the post.

So, assuming the Abbey one to be lost forever, I then went and opened an ISA with Halifax instead - same idea, transfer from Safeway to here. I did this last Monday, and opened it with £25.

Then on Saturday I received a "note" from Abbey telling me my ISA had changed to an Abbey Postal ISA and they returned my ID forms from the application I sent them. ARRRRRGGGHHH!!! So it was lost in the post was it!?!?!!?

So now I have a newly opened Abbey Postal ISA with all my money in it AND a Halifax ISA with a transfer in progress from Safeway. I also got a mini-statement from Abbey saying that a cheque I'd sent in March (£350) had only cleared on the 7th April!

This means I have two ISAs now - one with Abbey with all my money in which had a cheque clear on April 7th, and one with Halifax which I opened last week with £25. By the end of this mess, Halifax assures me all my money will be in their account and this will be my sole ISA. But what about the fact that, technically (but through no fault of my own, I think) I have put a deposit in 2 different ISAs in the same tax year? Am I right in thinking you can't do this, and more importantly what do I now do about it?

Cheers!

lipidicman

Dave2012 wrote:

So, assuming the Abbey one to be lost forever.....

This was your mistake. You should have had a note put on to cancel it!

I assume Halifax will try to transfer from safeway - which is empty now.

If you made two deposits then that is a problem - you need to sort this out. The halifax account should have a cooling off period - talk to them

Dave2012_2

I tried asking Abbey to do that but they wouldn't let me. I've spoken to Halifax - they don't seem to think the transfer will be a problem, but they glossed over the fact that 2 deposits have gone in and just said "if there's a problem then you'll hear from us." That doesn't really tell me how to solve it though....

lipidicman

I can see why this happened, but that wont be a valid excuse. If Abbey couldnt stop the application then you were not in a position to go to Halifax

I dont know how to sort it out, but I know that what you have done does break the inland revenue's rules. I believe the IR have an ISA helpline that might help. Dont rely on the Halifax to sort this out.

Where's ISAsmurf when you need her (or him, for all I know. I'm no use am I?)

isasmurf

lipidicman wrote:

Where's ISAsmurf when you need her (or him, for all I know. I'm no use am I?)

Here I am! Unfortunately all this moneysaving still isn't enough for me to retire. Oh, and it's him

I've read the OP post a few times, and I am still a little confused (it's been one of those days). Are you saying that you've made 2 deposits because the cheque cleared in April? I'm sure that if you paid into the ISA before April 6th then the deposit counts towards the previous tax year, regardless of when the cheque cleared. Do you have any proof that the deposit was made in March? HMRC rules are a little unclear, they say a deposit is made with "accepted funds", but they don't expand on if accepted means when the bank takes the cheque or clears the cheque.

The Banking Code requires all variable rate accounts to have a minimum 14 day cooling off period, so if your still within this time period you may be able to cancel the Halifax account.

In the worse case scenario that the cheque clearance date on the 7th April makes that a deposit in the current year, then the Abbey ISA is the valid account and new deposits into the Halifax account will be void.

I would speak to Abbey and find out if the deposit you made in March and cleared on the 7th April is for this year's allowance or last years. If last years then you have nothing to worry about.

if you want to speak to HM Revenue & Customs the ISA helpline number is 0845 604 1701 and is available Monday to Friday 8.30am to 4.30pm.

Dave2012_2

Hello ISAsmurf,

This is all confusing to me - I used to think I knew what I was doing.
From a mini-statement I got from abbey, the £350 cheque went into the Safeway account April 7th. However, this would be before I requested the transfer to Abbey. So if abbey set up the account in May, technically I don't think I've paid any money into the Abbey account this tax year. And now the Halifax account is open and a request has gone thru to transfer again from Safeway to Halifax. So the only deposit I've made in a "new" account this tax year is the £25 to Halifax.

This is the part of the rules I don't get: If you have made a payment in the 05/06 tax year into an ISA you've had for years, does this stop you from making a deposit into a new ISA in the 05/06 tax year? If it does, I think this is where I've gone wrong and it's the £25 deposit I put in the Halifax that is the problem. If I'd just requested a transfer alone, I'd have been fine!

Could you clarify this for me? I've got in touch with the Revenue, they've asked me to send them everything about all of them so they can sort it out, still waiting to hear.
Grrr. I blame Abbey for telling me it was all lost in the post (and myself for being thick)!

Thanks again

Dave

Dave2012_2

Think I'm in the clear - heard back from the IR and they said my Abbey ISA is valid, but my Halifax ISA is not. They were willing to overlook the HAlifax ISA as long as I invested no further money in it and limited my contributions to the Abbey one to £2975. They, like you guys, suggested I close the Halifax one, which I've just done. So, hopefully, as long as I don't mess with it again this tax year (which is unfortunate as the Abbey rate is likely to plummet isn't it?) I'll be OK.

Phew.

And Martin reckons ISA transfers are simple

lipidicman

Good to hear all is well.

Putting money in an old ISA does preclude you from opening a new one in that year

I think the Halifax rate will come down too, they have just cut their 'fixed rate' rate

The main downside is you are left dealing with Abbey!