Opened 2 new S&S In same years and part transferred previous years cash ISA both-lack of knowledge

Dear all

Thanks for the great forum.  Apologise for adding as new post. I couldn’t find a similar scenario related to multiple Shares ISA accounts and hence posting this as new post.

 I just found out one cannot have 2 ISA in same tax year. I had opened Hargreaves S & S ISA in middle of April 2020 to buy INDEX FUNDS & added new cash plus every month automatic funds investment into funds and towards end of April, I found trading212 offering commission free S&S ISA accounts to buy shares (buying shares in HL costing a lot on fees), I added £2000 to this account. Probably I did not read any terms while opening accounts using mobile phone apps.

I had cash ISA account over the years accumulating in a bank account with 0.2% interest rate. So I partly transferred cash ISA £6000 to Trading 212 for the plan to buy shares and partly another £6000 to Hargreaves to plan to invest in index funds.

Total this year allowance used so far in both Trading 212 and Hargreaves is £3800 and far away from the annual allowance but it is in 2 different accounts due to my lack of knowledge I opened 1 S&S for funds and other S&S for shares.

Total allowance this year : £3800

1st account this year : In Hargreaves: funds over the years plus this year allowance used little bit.

2nd account this year: In trading 212: with new investment and old cash ISA funds into it and invested in few shares and on -45% loss portfolio.  I kept 50% as cash and stopped investing on both now after reading few posts about multiple S&S ISA is same tax year on MSE forum.

I called HMRC helpline to discuss this and the call centre staff heard my scenario and he confirmed he don’t have answer in his system about next steps and he asked me to leave as it is and HMRC experts will write to me in future about this.

I am really worried about what will happen to my accounts as next step.

1.      Will they consider my 2nd account ISA as normal trade account and ask trading212 to sell my shares and close it with 45% loss? Or they will transfer all to normal trade account?

2.      Is the part transfers from previous years cash ISA allowed to have 2 different S&S shares account like me?

3.      Would they consider major money contribution came from previous ISA accounts for both HL and Trading212 accounts and they will transfer current years £2000 invested in shares on my 2nd ISA account out as not allowed and leave the previous years £6,000 as it is in my 2nd ISA in trading212s?

4.      Next tax year what can I do? Can I keep both accounts with old ISA money transferred into and buy shares without contributing new cash into it?

When will HMRC write me about next steps?

I appreciate any help and guidelines about what will happen from now. I wish i have read MSE forum before opening any accounts. 


Replies

  • edited 31 January at 5:16PM
    masonicmasonic Forumite
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    edited 31 January at 5:16PM
    It will just be the new money you paid into T212 that is in jeopardy, not the sum you transferred in from your cash ISA. The HL S&S ISA is completely safe as that is your valid S&S ISA for this tax year. Both cash ISA partial transfers were valid and within the rules. T212 should be capable of moving the investments out of the S&S ISA into a trading account without selling them if that is what HMRC requires. I would avoid doing any trading that muddied the waters as to which shares were bought with new money vs the cash ISA proceeds.
    HMRC may take a while to contact you. Some people have reported waiting >1 year. As it is a relatively small amount and you are well within the overall ISA allowance, they might let you off for a first offence. Otherwise it doesn't seem like the consequences are going to be very costly for you, so I would wait it out if I were you.
    All of this has no impact on what you can do next year. You could even add to the T212 ISA if you wished (providing you don't add money to another S&S ISA in the same tax year).
  • Remo3030Remo3030 Forumite
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    Third Anniversary First Post
    masonic said:
    It will just be the new money you paid into T212 that is in jeopardy, not the sum you transferred in from your cash ISA. The HL S&S ISA is completely safe as that is your valid S&S ISA for this tax year. Both cash ISA partial transfers were valid and within the rules. T212 should be capable of moving the investments out of the S&S ISA into a trading account without selling them if that is what HMRC requires. I would avoid doing any trading that muddied the waters as to which shares were bought with new money vs the cash ISA proceeds.
    HMRC may take a while to contact you. Some people have reported waiting >1 year. As it is a relatively small amount and you are well within the overall ISA allowance, they might let you off for a first offence. Otherwise it doesn't seem like the consequences are going to be very costly for you, so I would wait it out if I were you.
    All of this has no impact on what you can do next year. You could even add to the T212 ISA if you wished (providing you don't add money to another S&S ISA in the same tax year).
    Hi Masonic
    Thanks for replying me in the past, I have 1 more to ask i hope you won't mind sharing your knowledge on this.
    As I mentioned in my previous posts in this thread, i have question about Previous years CASH ISA transfer to Shares and Stocks ISA for current year.
    I transferred previous year cash ISA to current years S & S ISA , Is that considered as current years allowance if some one transferred old funds from cash to S&S ISA type. When i checked on my online account, I can only see it was not counted or added on to this years contribution.
    Thanks
  • masonicmasonic Forumite
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    Remo3030 said:
    I transferred previous year cash ISA to current years S & S ISA , Is that considered as current years allowance if some one transferred old funds from cash to S&S ISA type. When i checked on my online account, I can only see it was not counted or added on to this years contribution.
    If the transfer was initiated using your S&S ISA provider's ISA transfer service then it won't count towards your current year allowance.
  • Remo3030Remo3030 Forumite
    5 Posts
    Third Anniversary First Post
    Thanks a lot
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