ISA Clarification

Lee420

I am attempting to get my head around ISA rules etc, can any of you more experienced folk please confirm whether my conclusions are correct or not?

Here goes:
I can open a new ISA account with a different provider every new tax year, if required?

I can have ISA’s with different provides but can only use one ISA per tax year for deposits?

If I decide to transfer all previous years ISA allowances to the provider with the best interest rate it won’t affect the current years allowance?

Any assistance would be greatly appreciated.

Thanks

Blowsy

Hi Lee, welcome to MSE.

Here's the ISA basics:

There are 2 types of 'component' within an ISA namely cash and a stocks & shares. An ISA may offer both components (a maxi-ISA) or just one of them (a mini-ISA).

Two separate mini-ISAs (one for each component) can be taken out in the same tax year.

1. To answer your first question, yes you can take out an ISA with a different provider every tax year as long as you follow the above rules.

2. Once the financial year ends and a new one begins, the investment "door" to your 'old' ISA closes so you cannot invest any more money in that ISA (this is why it's important to try to use as much, if not all of your ISA allowance as possible each year). Your 'new' ISA will begin so any subsequent investments are made into your new ISA. However, your old ISAs are still active and just because you can't invest any more in them you can still benefit from tax free gains/interest. Note that if you "cash in" your old ISAs you'll never get them back because the door has closed.

3. ISA providers are required to allow transfers. You may transfer an ISA to a difference provider in the year of subscription, but then the entire ISA allowance for that year must be transferred to the new manager. Transferring 'old' ISA will not count towards this years ISA allowance assuming you make sure that you're transferring the old ISAs and not encashing them

Any further Q's just post/pm me.

Dave

Lee420

Cheers Dave