Two cash ISA not allowed?

lake888

Upon reading the HMRC forum, I found an answer to a query regarding cash ISA a bit confusing. 

The question is whether people can open an empty unfunded account and subscribing to, and also transfer existing funds from one ISA provider to another within the tax year if you have already contributed in the current tax year. 

The answer is "Your scenario is more about switching accounts and whilst this is still a new account, it is all done by the ISA provider and this is allowed. To open another account and leave empty, you cannot do that."

Anyone can shed some light on this please?

molerat

You can only fund one ISA per year with new money.

You also can open, and transfer into, as many ISAs as you wish in a year.

Reed_Richards

Your question does not make total sense.

You can only contribute new funds to one ISA in the current tax year.
You can transfer all those funds to a new provider.
You could contribute to an ISA this tax year and then apply for another ISA with a view to transferring funds into it and then change your mind so that it remains empty until the provider "times you out".  Whether that constitutes "opening an ISA" is debateable; I suppose it does in the sense that you can open a door and not go inside.

  

masonic

You cannot open an ISA and leave it empty. Providers will close ISAs that have not been used after a period of time.

wiseonesomeofthetime

masonic said:

You cannot open an ISA and leave it empty. Providers will close ISAs that have not been used after a period of time.

Oh no they don't. I have a Virgin Money one that they have left open, unfunded, for three years, come April 2024!

I had opened it with a view to transferring in an external ISA, only for the rate to be beaten the following day (or two), so never proceded.

It still, to this day, shows up in my list of open accounts with VM.

masonic

wiseonesomeofthetime said:

masonic said:

You cannot open an ISA and leave it empty. Providers will close ISAs that have not been used after a period of time.

Oh no they don't. I have a Virgin Money one that they have left open, unfunded, for three years, come April 2024!

I had opened it with a view to transferring in an external ISA, only for the rate to be beaten the following day (or two), so never proceded.

It still, to this day, shows up in my list of open accounts with VM.

I should have written "Competent providers..."

Reed_Richards

wiseonesomeofthetime said:

masonic said:

You cannot open an ISA and leave it empty. Providers will close ISAs that have not been used after a period of time.

Oh no they don't. I have a Virgin Money one that they have left open, unfunded, for three years, come April 2024!

I had opened it with a view to transferring in an external ISA, only for the rate to be beaten the following day (or two), so never proceded.

It still, to this day, shows up in my list of open accounts with VM.

So come the 24/25 tax year you can put a bit of money in and see if it works, i.e. that you are allowed to make a deposit.  If so, you may well be able to claim some sort of record.  But I agree with @masonic , a competent provider should not allow that to happen.  

MichaelAP

I am still confused….. 

1. I have one Cash ISA with a provider that is now low on interest.
2. I have this year opened another Cash ISA but with a different provider for £20,000
Question being:- Can I this year ‘transfer’ that older Cash ISA that is low on interest into a new Cash ISA that pays higher?
The transfer would be to the same provider where I opened a Cash ISA this year.

ColdIron

Yes if your new provider accepts transfers. If they don't you can find another provider that does

MichaelAP

ColdIron said:

Yes if your new provider accepts transfers. If they don't you can find another provider that does

That is great news… The provider which I funded £20,000 this year also does transfers. Obviously I cannot transfer my other ISA into that new ISA but I can open another ISA with them and transfer my old ISA into it.

Reed_Richards

What you do with ISAs containing only money contributed before 6th April 2023 has nothing whatsoever to do with your ISA arrangements for the current tax year.  If this applies to your old low interest ISA then you can transfer it wherever you like (and you initiate the transfer by applying to your new provider).  If you contributed to both the old low interest ISA and the one you opened with a different provider this tax year then you broke the current rules.