ISA rules question

webnibbler

Hoping someone can put me right on the following. I'm transferring my S&S ISA from HL to ii. ii have opened a new ISA in preparation for the transfer from HL and the process is underway. I'd like to start buying funds in my new ii ISA but I'm unsure if this would break ISA rules that you can only pay into one ISA per tax year. Is that right or am I misunderstanding the rules? Thanks in advance.

masonic

If you have partially used your 2019/20 ISA allowance in your HL S&S ISA then normally this would not be an issue because by the end of the tax year all your ISA subscriptions would end up with the same provider. However, being so close to the end of the tax year, the transfer might still be ongoing when the ISA managers fill out their annual returns and this could cause problems for you.

The safest option would be to see if HL will transfer the cash across quickly if you subscribe it to your HL ISA.

eskbanker

You can pay the rest of your 2019/20 £20K allowance into the new ISA once the transfer has been completed, but transferring an ISA containing current year money with only three weeks of the tax year left isn't advisable because of this.

webnibbler

@masonic @eskbanker Thanks, sounds like I'm better off just waiting for the three weeks until the new year. Pretty sure the markets will still be suppressed by CV then so hopefully be some good buying opportunities.

masonic

webnibbler said:

@masonic @eskbanker Thanks, sounds like I'm better off just waiting for the three weeks until the new year. Pretty sure the markets will still be suppressed by CV then so hopefully be some good buying opportunities.

There's a very real possibility that markets will be even lower in April than they are now. Here's hoping...

In the mean time, use the remainder of your ISA allowance in a cash ISA (or IF ISA), which you can transfer across just as soon as your HL transfer completes.