Owning multiple ISAs

TemmyTemjin

Hello,

I currently have a cash ISA but I'd like to open a different type of ISA - The Help to Buy.

I believe you can have multiple ISAs but you can only make deposits into one each tax year.

First off, is that true?

Secondly, assuming that is true if I was to open a second ISA and put funds into it, would any interest generated on the first ISA be allowed?

Thanks!

Alexland

You are only allowed to contribute new money into one Cash ISA per tax year (and a HTB ISA is a type of Cash ISA). The only way you can get around this is where you hold a Split Cash ISA where some providers can hold both your Cash ISA Part and HTB ISA Part in the same overall Cash ISA wrapper. In this situation you can contribute to both parts of the same Cash ISA in the same tax year.

Interest earned in Cash ISAs do not count as a contributions.

Alex.

Herbalus

That is partly correct. You can only invest into one of each type of ISA in each tax year (though if you pay money into one ISA, then open another ISA and transfer your subscribed ISA to this new one, you can continue investing in that second one as the first one is closed).

There are several types of ISA as you say. So you can invest into bot a cash ISA and a S&S ISA in the same tax year (though subject to the £20k allowance which works across all 2).

Interest doesn't count as using up your allowance and is not a subscription to an ISA. So if you open a new ISA in a new tax year, any interest earned on previous years' ISAs will continue unaffected and is perfectly allowed.

eskbanker

TemmyTemjin wrote: »

I currently have a cash ISA but I'd like to open a different type of ISA - The Help to Buy.

I believe you can have multiple ISAs but you can only make deposits into one each tax year.

First off, is that true?

While agreeing with the points made above, I'd just add that this is a great time of year to be facing this dilemma as you only have to wait a couple of weeks for the start of a new tax year, so you're free to open a HTB on or anytime after 6 April regardless of what you've paid into during the tax year ending 5 April!