advice needed regarding 2 stocks & shares ISAs

vanbobble

Hi. 
I have just realised I may have made an error some time ago, and looking for best way on how to resolve it. 
It appears in March 2019 I opened 2 stocks and shares ISA's one with H&L and one with Vanguard. I suspect that I opened the H&L one first.
I transferred £100 into the H&L one, which is still just sitting there I never invested in any funds it seems. 
I transferred £1000 into the Vanguard one and put it in a fund.
Then in July 2020 I transferred substantially more (near the years allowance) into the Vanguard one into the same fund.

I have just realised that I should not have opened or contributed to 2 in the same year. 
As I mentioned the money in the H&L one has not been invested. Can I just close that one and avoid any problems? Or is is best to contact HMRC?  If so am I going to get stung for anything?

virenque

You can open 2 S&S ISAs in the same financial year if only one of them is funded with new money. If the other is funded via a transfer of a previous years allowance then that is fine. So it will depend how you funded the ISAs. But don't contact HMRC either way!

eskbanker

If you paid into two S&S ISAs in March 2019 then if HMRC were going to do anything about it then they would have done so by now.  Any corrective action would have applied solely to 2018/19 contributions, and those made in subsequent tax years wouldn't have been affected, so carry on and do what you like now (sticking to the rules of course!).  The restrictions relate to paying money into ISAs, so whether or not it's invested after that makes no difference by the way....

vanbobble

virenque said:

You can open 2 S&S ISAs in the same financial year if only one of them is funded with new money. If the other is funded via a transfer of a previous years allowance then that is fine. So it will depend how you funded the ISAs. But don't contact HMRC either way!

they were both funded via bank transfer, so not with funds from different years.. so what should I do? I was planning on closing the H&L one.. will that trigger something?

vanbobble

eskbanker said:

If you paid into two S&S ISAs in March 2019 then if HMRC were going to do anything about it then they would have done so by now.  Any corrective action would have applied solely to 2018/19 contributions, and those made in subsequent tax years wouldn't have been affected, so carry on and do what you like now (sticking to the rules of course!).  The restrictions relate to paying money into ISAs, so whether or not it's invested after that makes no difference by the way....

Thanks that's useful to know. I was planning on closing the H&L one, topping up the Vanguard one with the remaining allowance for this year, then putting more in in the next Tax year. Closing the H&L one should not cause any issue to arise? like HMRC being notified?

eskbanker

vanbobble said:

eskbanker said:

If you paid into two S&S ISAs in March 2019 then if HMRC were going to do anything about it then they would have done so by now.  Any corrective action would have applied solely to 2018/19 contributions, and those made in subsequent tax years wouldn't have been affected, so carry on and do what you like now (sticking to the rules of course!).  The restrictions relate to paying money into ISAs, so whether or not it's invested after that makes no difference by the way....

Thanks that's useful to know. I was planning on closing the H&L one, topping up the Vanguard one with the remaining allowance for this year, then putting more in in the next Tax year. Closing the H&L one should not cause any issue to arise? like HMRC being notified?

I don't know the details of exactly what data is reported by ISA managers to HMRC but in general it's only current year contributions that are of any interest to anyone, so closing an old account from two years ago shouldn't cause any issues.  You could always ask Vanguard to transfer in the HL ISA (there's no 'and' in Hargreaves Lansdown by the way....).