ISA rules regarding new applications in the same year

Bratchman

I thought I'd got my head around ISA rules but today's experience is making me wonder. I'm attempting to do two things...
1. Open a new cash ISA with one provider using brand new 'unsubscribed' funds taking me up to the maximum for that account.
2. Open a second cash ISA with another provider and fund it by transferring in 'fully subscribed' funds only, from a third provider, crucially made in previous tax years.
My understanding was that although I was planning to open two ISA's with different providers in the same tax year, as I would only be putting 'new' funds into one of them it was allowed. I'm now thinking I may have got this wrong - some providers are saying it's ok, others say it's a no-no and you can only open one cash ISA with one provider in the same tax year and ultimately how they are funded doesn't alter this.
I don't want to fall foul of HMRC, can someone help?

badger09

Bratchman said:

I thought I'd got my head around ISA rules but today's experience is making me wonder. I'm attempting to do two things...
1. Open a new cash ISA with one provider using brand new 'unsubscribed' funds taking me up to the maximum for that account.
2. Open a second cash ISA with another provider and fund it by transferring in 'fully subscribed' funds only, from a third provider, crucially made in previous tax years.
My understanding was that although I was planning to open two ISA's with different providers in the same tax year, as I would only be putting 'new' funds into one of them it was allowed. I'm now thinking I may have got this wrong - some providers are saying it's ok, others say it's a no-no and you can only open one cash ISA with one provider in the same tax year and ultimately how they are funded doesn't alter this.
I don't want to fall foul of HMRC, can someone help?

You seem to have it right.

HMRC rules don't say anything about opening more than one (of each type) of ISA in a tax year. The rule is that you can only pay 'new money' into one (of each type) at a time.

Just to be sure, what exactly do you mean, when you say "using brand new 'unsubscribed' funds taking me up to the maximum for that account"?

Have you paid any new money into a cash ISA since 6th April 2020? If not, then you can do what you suggest. However, if you've already paid some into a cash ISA this tax year, you can't open & pay into another one. 

Bratchman

Thanks, I'm opening the first ISA with Principality Building Society, the maximum balance allowed for the particular account is £20k which I'm paying in as completely new money. I've paid no other funds into any other ISA this year.

Albermarle

One point to watch is when opening the second cash ISA ( just to transfer previous years subscriptions in ) most seem to indicate that an actual opening deposit is needed . However from previous threads the wording  can be a bit misleading as most apparently do not actually insist on this , but maybe some do .