ISA Rules - Cash ISA and Help to Buy ISA

DrJones18

Hi

I need some help as I'm getting conflicting information.

I have a cash ISA in which I have put in £3k this tax year 18/19.

I am now looking to open a Help to Buy ISA with a different provider as my current ISA provider does not offer this product.

I have been told by a bank that I can open a cash ISA and Help to Buy ISA with different providers in the same tax year as long as there is only one of each product in a tax year and not over £20k. I've been told by the same bank that if I have paid into a cash ISA in 18/19 tax year I can't open a Help to Buy in the same tax year.

Not sure who is correct.

HELP!!

masonic

A Help to Buy ISA is a cash ISA, so you cannot pay into one in the same tax year as you pay into a different cash ISA. So the second statement you've been told is correct.

You have a few options, you could:
1) Transfer the current year money in full to a provider such as Nationwide, who allow you to split your cash ISA among several sub-accounts.
2) Flexibly withdraw the current year money to leave a balance of a little under £1,200 (to allow for interest), then transfer the current year money to a HTB ISA (this requires that your existing cash ISA allows flexible withdrawals AND your HTB ISA accepts transfers in)
3) Transfer the current your money in full to a different type of ISA, such as IF ISA or S&S ISA. You could then withdraw the money and close the account and you'd be allowed to open and fund your HTB ISA.

There may be a 4th option, which may or may not be reasonable depending on the total balance of your existing cash ISA.