Can I open a second ISA in the same tax year but NOT contribute to it?

CreditCardChris

Every single thing I read online says you cannot contribute to 2 ISAs in the same tax year which I'm very well aware of, but is it illegal to simply open a second ISA in the same tax year but just not pay anything into it until the new tax year starts? 

Thrugelmir

Seems a totally pointless exercise. 

CreditCardChris

Thrugelmir said:

Seems a totally pointless exercise. 

Sigh, why do people reply without answering the question? You just wait my time and yours. 

eskbanker

CreditCardChris said:

Every single thing I read online says you cannot contribute to 2 ISAs in the same tax year which I'm very well aware of, but is it illegal to simply open a second ISA in the same tax year but just not pay anything into it until the new tax year starts?

It's not illegal to do this but in some cases the ISA won't still be available for contributions by the time the new tax year starts, so may indeed be a pointless exercise, depending on the scenario and objective you have in mind.  And, just to be clear, the rule is that you can only pay new money into one ISA of each type per tax year, so you can pay into two if they're different types....

Costabit

What are your objectives in this ?

Haven’t thought of it before and am wondering now if I have missed a trick in my quest for wealth.

masonic

Costabit said:

What are your objectives in this ?

Haven’t thought of it before and am wondering now if I have missed a trick in my quest for wealth.

The main reason someone might do this is to secure a deal towards the end of a tax year when they have no remaining ISA allowance in order to subscribe at the beginning of the next tax year.

refluxer

I think it's common for cash ISAs to have minimum operating balances of £1 (and more) so if you opened an account and didn't fund it within the allowed time, then it would be closed.

For example - the T&Cs for one of my ISAs states that "You have 5 business days from the account opening date in which to make your initial deposit. If you have not made your initial deposit in this time your account will be closed."

I guess there could be a scenario in which you could open one a day or so before the end of the current tax year and fund it with the next year's allowance once the new tax year kicks in ?

Costabit

masonic said:

Costabit said:

What are your objectives in this ?

Haven’t thought of it before and am wondering now if I have missed a trick in my quest for wealth.

The main reason someone might do this is to secure a deal towards the end of a tax year when they have no remaining ISA allowance in order to subscribe at the beginning of the next tax year.

Thanks @masonic
Any deals going about at the mo

masonic

refluxer said:

I think it's common for cash ISAs to have minimum operating balances of £1 (and more) so if you opened an account and didn't fund it within the allowed time, then it would be closed.
For example - the T&Cs for one of my ISAs states that "You have 5 business days from the account opening date in which to make your initial deposit. If you have not made your initial deposit in this time your account will be closed."
I guess there could be a scenario in which you could open one a day or so before the end of the current tax year and fund it with the next year's allowance once the new tax year kicks in ?

That's a remarkably short window to make a deposit. Perhaps this is a fixed-term ISA offered by a provider that is constantly changing its rates?

I've opened ISA accounts in the past specifically to transfer in from another ISA and had to send a transfer form in the post, which was not processed by the ISA provider for 2-3 weeks, all the while the account sat empty. Some people opened HTB ISAs and left them sitting empty for months before making their initial deposit - we know as they were unsure if they could still make the £1,200 one-off opening deposit or if that was only possible in the first month the account was open (they could).

It's not uncommon for providers to close an unused ISA, but it's more commonly a couple of weeks, a month, or longer before any action would be taken.

Costabit said:

masonic said:

Costabit said:

What are your objectives in this ?

Haven’t thought of it before and am wondering now if I have missed a trick in my quest for wealth.

The main reason someone might do this is to secure a deal towards the end of a tax year when they have no remaining ISA allowance in order to subscribe at the beginning of the next tax year.

Thanks @masonic
Any deals going about at the mo

There hasn't been anything I'd describe as a good deal for a standard fixed or variable cash ISA since circa 2011 when Newcastle Building Society were under some financial strain and had to offer a 5 year cash ISA at 5%, especially now most people don't pay any tax on their savings due to low rates and the Personal Savings Allowance. There have been a few cashback deals and other incentives for S&S ISAs, but nothing notable at present.

refluxer

masonic said:

That's a remarkably short window to make a deposit. Perhaps this is a fixed-term ISA offered by a provider that is constantly changing its rates?

I've opened ISA accounts in the past specifically to transfer in from another ISA and had to send a transfer form in the post, which was not processed by the ISA provider for 2-3 weeks, all the while the account sat empty. Some people opened HTB ISAs and left them sitting empty for months before making their initial deposit - we know as they were unsure if they could still make the £1,200 one-off opening deposit or if that was only possible in the first month the account was open (they could).

It's not uncommon for providers to close an unused ISA, but it's more commonly a couple of weeks, a month, or longer before any action would be taken.

Yes, those were the T&Cs for a Principality cash ISA towards the end of last year. I must admit I'd presumed this was normal (at least for them) but, thinking about it, rates for fixed products with many companies were sometimes only hanging round for a matter of days at that time, especially when they made the MSE top tables ! Fortunately, the time limit didn't apply to transfers as that's how I was funding mine but they presumably did need to at least receive the transfer form fairly quickly.

I just checked the conditions for my Paragon ISA (opened in the previous tax year) and their time limit was 28 days, so you're right - it doesn't look like the Principality's 5 day limit was typical.

benbay001

Hi all, i was about to ask the same question, so this is convenient. 
I want to switch from my current iWeb ISA to II for the next tax year. Id like to be able to start contributing to the new ISA at the very start of the new tax year, so can i open the II account now? As long as i dont pay in? 
Thanks