Reinvesting dividends classed as paying into an ISA?

MaxiRobriguez

eskbanker said:

MaxiRobriguez said:

Q1 No, Q2 No.
It only counts if it is a *contribution*. Think of contribution as you adding money to the ISA, not receiving money from whatever is already inside it, like selling a fund or receiving a dividend.

Which makes the answer to Q2 'yes', as per the previous post!

I read it differently. Op said:

"so if the fund pays a dividend into your ISA and then you use that money to buy back into the fund, but you also"have another S&S ISA on trading212, does that count as contributing to two ISAs in the same year?"

Perhaps I'm wrong but I read that as Op has S&S ISA A, and S& ISA B. He receives a dividend within S&S ISA A, the proceeds of which he uses to buy more of whatever stock was inside S+S ISA A.

He then uses some money from a Current Account C to pay into S+S ISA B.

Which would be absolutely fine. That would not be classed as funding two ISAs.

eskbanker

MaxiRobriguez said:

eskbanker said:

MaxiRobriguez said:

Q1 No, Q2 No.
It only counts if it is a *contribution*. Think of contribution as you adding money to the ISA, not receiving money from whatever is already inside it, like selling a fund or receiving a dividend.

Which makes the answer to Q2 'yes', as per the previous post!

I read it differently. Op said:

"so if the fund pays a dividend into your ISA and then you use that money to buy back into the fund, but you also"have another S&S ISA on trading212, does that count as contributing to two ISAs in the same year?"

Perhaps I'm wrong but I read that as Op has S&S ISA A, and S& ISA B. He receives a dividend within S&S ISA A, the proceeds of which he uses to buy more of whatever stock was inside S+S ISA A.

He then uses some money from a Current Account C to pay into S+S ISA B.

Which would be absolutely fine. That would not be classed as funding two ISAs.

Indeed, but that was Q1 not Q2, we all agree that the answer to Q1 is no!

Having said that, as Eco_Miser points out, the answer to Q2 isn't quite as straightforward as yes/no anyway, given that the term 'transferring' has significance in the world of ISAs, so ISA transfers (from another ISA) aren't contributions but 'transferring money into the ISA' (as opposed to recycling money already in there) probably is a contribution, depending on exactly what OP meant by that....

bowlhead99

MaxiRobriguez said:

eskbanker said:

MaxiRobriguez said:

Q1 No, Q2 No.
It only counts if it is a *contribution*. Think of contribution as you adding money to the ISA, not receiving money from whatever is already inside it, like selling a fund or receiving a dividend.

Which makes the answer to Q2 'yes', as per the previous post!

I read it differently. Op said:

"so if the fund pays a dividend into your ISA and then you use that money to buy back into the fund, but you also"have another S&S ISA on trading212, does that count as contributing to two ISAs in the same year?"

Perhaps I'm wrong but I read that as Op has S&S ISA A, and S& ISA B. He receives a dividend within S&S ISA A, the proceeds of which he uses to buy more of whatever stock was inside S+S ISA A.

He then uses some money from a Current Account C to pay into S+S ISA B.

Which would be absolutely fine. That would not be classed as funding two ISAs.

Correct. In his original post, he was concerned about funding the Trading 212 ISA when there is also some investment going on in his Vanguard ISA.  As we all agree, the Vanguard ISA is only investing money that is already in the ISA (arriving as returns on  the investments), which does not count as a new subscription. 

So, the answer to "does that count as contributing to two ISAs in the same year?" is No.

Then in the same post he made a second question: "So a contributing is classified as transferring money INTO the ISA and that's it?"

The answer to that second question is "Yes, basically, if you re-word the question to clarify that you mean transferring money into an ISA from your bank account rather than from another ISA. The contribution into an ISA of your money from outside an ISA is what's meant by a contribution or subscription to your ISA"

So in looking at the two questions in his post at 12:21 8 Jan, the answer to Q1 "is this contributing to two ISAs?" is No, and the answer to Q2 along lines of "is contribution only concerned with contributing new money to the ISA and that's it?" is Yes.

But you wrote "Q1 No, Q2 No.", which is why eskbanker said you were wrong and that you should have said "Q1 No, Q2 Yes" as AlanP had done.

Perhaps you meant that the question from his original post 27 Dec, "I manually use that dividend pay out each quarter to buy more shares of the same fund, is that classed as "paying into" an the ISA?" was his Q1, which was No, and his "Quick follow up" question from 8 January "so if the fund pays a dividend into your ISA and then you use that money to buy back into the fund, but you also have another S&S ISA on trading212, does that count as contributing to two ISAs in the same year?" was his Q2, which was also No ;

and you are not going to bother with a yes/no answer to his other clarification question along the lines of "is contribution only concerned with contributing new money to the ISA and that's it?" which would be Yes - because his phrasing wasn't great and rather than give it a yes/no, you feel that has already been adequately dealt with by the rest of your response.

MaxiRobriguez

Putting in the "Perhaps I'm wrong but I read that as" was the right thing to do, as I read the post incorrectly.

Having now read the entirety of the post (sorry!) I agree it's Q1 no and Q2 yes*.

*Assuming the OP means contributing from a non-ISA source into ISA, anyway. Perhaps I should shut up now rather than confuse matters further.