ISA frustration

Roux

I have recently discovered that I have paid into two cash ISAs in the same tax year and that this is against the rules.  These are a HTB ISA with Nationwide and a cash ISA with Kent Reliance.  Between the two I have only paid in £4,100 so well off the £20,000 annual allowance.  I had been planning on paying more into the cash ISA in this tax year, which I realise now I shouldn't do.  

Having spoken to Nationwide they have told me about their 'linked' HTB ISAs and cash ISAs and that if I opened a cash ISA with them I could pay into it in the same tax year as my existing HTB ISA.  However, I shouldn't open and pay into a new cash ISA with Nationwide in this tax year as I have paid into my existing cash ISA with Kent Reliance.  

I rang HMRC for advice about what to do and they said it was nothing to do with them, they just act on whatever the banks tell them following the end of the tax year.  HMRC said to speak to my bank so I rang Kent Reliance who said it's too late to cancel any payments paid in (one payment in June 2019) and if I transferred the money out it would still be counted for this year.  Kent Reliance advised me to speak to a financial advisor which I don't really want to do due to the cost.

Basically, I'd like to have the payment into the Kent Reliance cash ISA 'cancelled' so that I can open a cash ISA with Nationwide and pay in my remaining ISA allowance for this tax year.  I'm beginning to think it's not going to happen and I should just give up on the hope I can use my remaining ISA allowance for this tax year.  I don't think it would be wise to open a cash ISA with Nationwide and pay into it knowing I've already paid into another cash ISA this tax year...…………….Thoughts?

masonic

There is no point talking to a financial adviser.

You could attempt to transfer the KRBS cash ISA to Nationwide before the end of the tax year, but there is a chance they would not accept it since they know you have already subscribed to a cash ISA with them. But I see no harm in trying.

Which cash ISA did you pay into first? If Nationwide, then you are free to open another cash ISA there to use the rest of your allowance, as it would be the KRBS ISA that is invalid.

In any case you are free to open and pay cash into a S&S ISA or an IF ISA without making any investments, then transfer to Nationwide after the end of the tax year.