Closing ISA within 14 days - can I open another?

caveman38

masonic said:

caveman38 said:

masonic said:

caveman38 said:

Seeing as I was finding this information for my wife, I felt that I needed to be !00% sure. Sorry Masonic I am not ignoring your info / advice, but.
I have phoned a number of Banks & BS's and all seem to think that she cannot open another this year and cooling off period does not apply to ISA's. Yesterday I used the HMRC general enquiries, where you do not furnish any personal details but ask questions. Assuming these people are HMRC qualified staff and not helpful members of the public. I got two answers where one man said she cannot and a lady said she could open another ISA using the 14 day cooling off facility on her first one. 
It is a hard decision and not wanting to fall foul of HMRC rules, she will refrain from opening one in 22/23, a shame.

I don't know why anyone would be swayed by the non-binding opinions of poorly trained customer service advisers (who couldn't even agree with each other) that is contradicted by official documentation, but your choice...

If you are going to go down this path, why not get Santander to reinstate the ISA so that she can transfer it and use it elsewhere?

Assuming they would allow that. Could it be deposited with a nominal amount and transferred after a short period and added to at the new providers - to save on penalties.

In theory, it could be reinstated and left empty, or reinstated as easy access. If I were you, I'd be pushing on them quite hard to to come up with solutions that do not leave her out of pocket, such as compensation to cover any transfer out penalty. They've given her factually incorrect information that has left her in the position where she might otherwise lose her allowance. If a complaint were pursued, I have not doubt it would be upheld either by someone a bit more switched on at Santander, or the Financial Ombudsman Service.

It is quite clear that a cancellation period does apply to all Santander's fixed ISAs.

https://www.santander.co.uk/assets/s3fs-public/AD_documents/h250078_p542027_save0610nov22h3_lr.pdf

Where cancellation is invoked, the ISA should be not reported to HMRC, so the customer is free to use their allowance elsewhere.

What you've been told is, despite cancelling, Santander intends to report to HMRC that your wife has subscribed (presumably £5) to a cash ISA with them this year.

This is HMRC's position on the issue: https://www.gov.uk/guidance/how-to-open-an-isa-as-an-isa-manager#cancellation

Thanks again Masonic. From the information you have dug up, I assume that means Santander may inform HMRC that an ISA was opened with them but not necessarily mention that it was closed 3 days later. HMRC though will ignore that ISA because of the cancellation within set period and allow the second ISA to remain valid and tax free.
How would they be aware of the closure time of the first one or would/could they ask my wife to explain and furnish letters with dates to justify it?

masonic

caveman38 said:

masonic said:

caveman38 said:

masonic said:

caveman38 said:

Seeing as I was finding this information for my wife, I felt that I needed to be !00% sure. Sorry Masonic I am not ignoring your info / advice, but.
I have phoned a number of Banks & BS's and all seem to think that she cannot open another this year and cooling off period does not apply to ISA's. Yesterday I used the HMRC general enquiries, where you do not furnish any personal details but ask questions. Assuming these people are HMRC qualified staff and not helpful members of the public. I got two answers where one man said she cannot and a lady said she could open another ISA using the 14 day cooling off facility on her first one. 
It is a hard decision and not wanting to fall foul of HMRC rules, she will refrain from opening one in 22/23, a shame.

I don't know why anyone would be swayed by the non-binding opinions of poorly trained customer service advisers (who couldn't even agree with each other) that is contradicted by official documentation, but your choice...

If you are going to go down this path, why not get Santander to reinstate the ISA so that she can transfer it and use it elsewhere?

Assuming they would allow that. Could it be deposited with a nominal amount and transferred after a short period and added to at the new providers - to save on penalties.

In theory, it could be reinstated and left empty, or reinstated as easy access. If I were you, I'd be pushing on them quite hard to to come up with solutions that do not leave her out of pocket, such as compensation to cover any transfer out penalty. They've given her factually incorrect information that has left her in the position where she might otherwise lose her allowance. If a complaint were pursued, I have not doubt it would be upheld either by someone a bit more switched on at Santander, or the Financial Ombudsman Service.

It is quite clear that a cancellation period does apply to all Santander's fixed ISAs.

https://www.santander.co.uk/assets/s3fs-public/AD_documents/h250078_p542027_save0610nov22h3_lr.pdf

Where cancellation is invoked, the ISA should be not reported to HMRC, so the customer is free to use their allowance elsewhere.

What you've been told is, despite cancelling, Santander intends to report to HMRC that your wife has subscribed (presumably £5) to a cash ISA with them this year.

This is HMRC's position on the issue: https://www.gov.uk/guidance/how-to-open-an-isa-as-an-isa-manager#cancellation

Thanks again Masonic. From the information you have dug up, I assume that means Santander may inform HMRC that an ISA was opened with them but not necessarily mention that it was closed 3 days later. HMRC though will ignore that ISA because of the cancellation within set period and allow the second ISA to remain valid and tax free.
How would they be aware of the closure time of the first one or would/could they ask my wife to explain and furnish letters with dates to justify it?

An ISA closed under cancellation rights should not be reported to HMRC at all, or it should be reported as an ISA that's received zero subscriptions. If reported, the date of closure would be included in the record. What you've been told suggests they intend to report it and report it having received subscriptions. This is either a mistake by the employee who told you or a policy error by Santander. Getting written confirmation of the cancellation within the cancellation period would be a good idea. If you do so as part of a complaint, someone more knowledgeable at Santander may be able to confirm that they won't report it as a subscribed ISA, and she is free to open a cash ISA elsewhere this tax year.