Cash ISA mistake

djenkdjenk Forumite
1 Post
MoneySaving Newbie
I've made an error in the way I have used my cash ISA allowance this tax year. I have had a help to buy ISA for ages now, and was trying to sort out my finances this tax year so closed a savings account (non ISA) with a rubbish interest rate and opened a cash ISA with another provider. Since opening the second account, I have been making monthly contributions into both the HTB ISA AND the new cash ISA. I was not aware of the rule saying that you cannot make contributions into two ISAs of the same type in the same tax year until recently.

I contacted HMRC this morning and they told me to just inform the banks/building societies. I then contacted the provider for the cash ISA and they advised that I would have to close one of the ISAs. I will contact the provider for the HTB ISA later today to see what they think, but I'm curious about the advice from this forum? I've seen some similar posts and no one has advised that they close the accounts that I have seen.

I am also wondering if this will affect my ability to claim the 25% on my HTB ISA? I've just reserved a new build plot so will be trying to claim that money soon. Is there any way I can still claim that bonus, or have I invalidated my chances now?

Thanks for any advice

Replies

  • AlexlandAlexland Forumite
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    It shouldn't affect your ability to claim the HTB ISA bonus for contributions made in previous tax years.
    The deposit sequence this tax year should determine which ISA contributions might be declared as invalid.
    If you contributed first into the Cash ISA then it might be an option to withdraw money so that it is £200 or less (inc unpaid interest) and then ask the HTB ISA provider to transfer the Cash ISA into your HTB ISA (within the monthly contribution allowance) so that you end the tax year having only contributed to one ISA.
  • edited 27 January at 5:40PM
    masonicmasonic Forumite
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    edited 27 January at 5:40PM
    Presuming you wish to prioritise keeping your contributions to the HTB ISA, then it would be best to do as Alex suggests. Closing an ISA after a mistake like this is not going to help matters. If the other cash ISA allows flexible withdrawals, then removing all of the money you paid in might get around the issue, but a transfer, if accepted, is safer.
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