Confused about ISA rule

Vidsify

So I currently have an ISA and a LISA. From what ive read I can have a maximum of £20,000 in ISAs. Is this across all my ISAs and LISA? 

Also I'm looking to open a new ISA with a better interest rate. If I was to move the contents of my current ISA into a new ISA does that count towards my £20,000 limit?

eskbanker

A LISA is an ISA, but yes, the £20K annual contribution limit applies to the total paid in across all ISAs, whether they're cash, S&S, Lifetime or innovative finance.  Transfers don't count towards that £20K annual ISA contribution limit provided you use the new provider's ISA transfer process rather than withdrawing and redepositing yourself.

Vidsify

eskbanker said:

A LISA is an ISA, but yes, the £20K annual contribution limit applies to the total paid in across all ISAs, whether they're cash, S&S, Lifetime or innovative finance.  Transfers don't count towards that £20K annual ISA contribution limit provided you use the new provider's ISA transfer process rather than withdrawing and redepositing yourself.

Awesome. Thank you very much for clarifying

Newly_retired

The £20k limit is the maximum you can deposit per tax year, not the maximum you can hold .

missymouse

I already have a S&S isa that isn’t brilliant. Can I deposit the rest of my allowance in a new S&S ISA without investing in this tax year ready for next year so I don’t lose my allowance. Is there a holding option?

masonic

missymouse said:

I already have a S&S isa that isn’t brilliant. Can I deposit the rest of my allowance in a new S&S ISA without investing in this tax year ready for next year so I don’t lose my allowance. Is there a holding option?

If you haven't paid into your 'not brilliant' S&S ISA this tax year, then yes you can open another and fund it without buying any investments until a time of your choosing.

missymouse

I have paid in regularly but don’t think I want to add anymore.

i was thinking about using a different provider next year. Could I put money in the new one now without it being invested like a holding account

eskbanker

missymouse said:

I have paid in regularly but don’t think I want to add anymore.

i was thinking about using a different provider next year. Could I put money in the new one now without it being invested like a holding account

Most, but not all, S&S ISA providers support uninvested cash holdings, but do bear in mind the overarching ISA rule that you can only pay new money into one ISA of each type in any given tax year, as it isn't clear to me from your posts exactly which ISAs you've funded during this current tax year....

missymouse

It is a S&S Nutmeg ISA and I’ve drip fed into it over a few years’.
I'm loathe to add a huge chunk of cash in now even though I have available money to invest 
i thought I may open a Vanguard ISA next tax year

badger09

missymouse said:

It is a S&S Nutmeg ISA and I’ve drip fed into it over a few years’.
I'm loathe to add a huge chunk of cash in now even though I have available money to invest 
i thought I may open a Vanguard ISA next tax year

You can't pay any new money into another S&S ISA this year unless you ask the new ISA provider to transfer your Nutmeg ISA to them.  As you don't seem to want to do that, why not open any bog standard instant access cash ISA now, fund it with your 'huge chunk of cash' up to the max total allowance of £20k, then after 6th April ask Vanguard to transfer the cash into your shiny new Vanguard ISA?

Then you can decide whether to pay your 2020/20 ISA allowance into either Nutmeg or Vanguard - but not both!

johnthorpe3

I am in dispute at the moment with my existing ISA provider and HMRC. I tried to transfer my existing funds to a new provider  using the provider's web pages, and unfortunately they withdrew the funds and paid them into my current account. They say that it is my error and is "irreversible". HMRC have agreed with them. I am adamant that I had no intention of withdrawing my funds, which are considerable, and which I transferred to them last year without any problems. My choice of provider being taken from Martin's lists on each occasion. I have referred my problem to the Financial Ombudsman but they are knee deep in other more pressing problems for the foreseeable future. As things stand, I am losing the ISA shelter for my funds which have been built up over many years. Does anyone have ideas as to how I can proceed ? I need to do something positive before 5th April if possible.
Thanks John.