ISA question - opening two accounts in same tax year

amanwithaplan

Hello - wonder if anyone who is good with the ISA rules can answer my question.

Got a variable cash ISA with existing funds in it. Not subscribed any new funds in this tax year 23/24. Have just opened a fixed term ISA with same provider and instructed them to transfer £85k to this new fixed ISA (protects the rate for a year since only one direction rates will go I think)

Now separately, I have another normal savings account which has enough in it that I am above the savings allowance for tax at 5.22%.

So, can I open a new ISA with say, ZOPA, and put my 23/24 £20k allowance in here, or can I not do this now until 24/25 tax year because I transferred the ISA I mentioned above?

Essentially, I will have opened two ISA accounts, one the transfer and one the 'fresh' ISA which I will use this years £20k sub with.

Thanks!

GrubbyGirl_2

You can open as many ISA accounts as you want each year but you can only subscribe (put new money) into one.  So opening one to transfer your old ISA plus opening another for this years subscription is fine

jimjames

GrubbyGirl_2 said:

You can open as many ISA accounts as you want each year but you can only subscribe (put new money) into one.  

That's only true for cash ISAs. You can open cash and S&S ISAs and pay into both each year

amanwithaplan

jimjames said:

GrubbyGirl_2 said:

You can open as many ISA accounts as you want each year but you can only subscribe (put new money) into one.  

That's only true for cash ISAs. You can open cash and S&S ISAs and pay into both each year

Yeh I'm only talking about cash ISAs for this particular question.

Albermarle

amanwithaplan said:

jimjames said:

GrubbyGirl_2 said:

You can open as many ISA accounts as you want each year but you can only subscribe (put new money) into one.  

That's only true for cash ISAs. You can open cash and S&S ISAs and pay into both each year

Yeh I'm only talking about cash ISAs for this particular question.

If you read through the forum you will lots of similar questions and answers on a regular basis, so a good way to get up to speed on ISA issues.

amanwithaplan

I've done that and I've not found a post with the exact same issue, hence asking.

I've also googled lots of articles from banks, etc and I'm getting mixed answers.

Some say you can't open two ISAs of the same type in the same tax year, some say you can open as many as you like but only subscribe to one - similar to grubby girl_2 above.

badger09

GrubbyGirl_2 is correct 

As you have not paid any new money into your existing Cash ISA this tax year, you can open another, with whichever provider you choose & pay in this year’s allowance. 

masonic

I've been asked by PM to weigh in on this one. GrubbyGirl_2 is correct and the only confusion is use of the term "ISA" to describe a cash ISA, so, with my adjustments...

"You can open as many cash ISA accounts as you want each year but you can only subscribe (put new money) into one (until 6th April 2024 when this rule will be abolished).  So opening one to transfer your old ISA plus opening another for this years subscription is fine "

I hope that makes the situation crystal clear.

flaneurs_lobster

Given the above (very clear) answers, can I ask if I have broken the rules. 

Opened a Flexible Cash ISA in Jan 23, funded with £10K. I then added further small amounts monthly until June. 

This ISA matured this week and was transferred to a new 1 year Fixed Cash ISA. I've added a further £5K to this ISA.

Does that mean I have subscribed to 2 Cash ISAs in the same tax year (seems obvious to me that I have). What are the consequences and can I take steps to reverse or mitigate any wrongdoing?

badger09

flaneurs_lobster said:

Given the above (very clear) answers, can I ask if I have broken the rules. 

Opened a Flexible Cash ISA in Jan 23, funded with £10K. I then added further small amounts monthly until June. 

This ISA matured this week and was transferred to a new 1 year Fixed Cash ISA. I've added a further £5K to this ISA.

Does that mean I have subscribed to 2 Cash ISAs in the same tax year (seems obvious to me that I have). What are the consequences and can I take steps to reverse or mitigate any wrongdoing?

No you haven’t broken the rules. 

Your current year Cash ISA subscriptions (April to June) were all transferred into a new Fixed Rate ISA. That new FRISA is now the only Cash ISA that you can pay new money into during this tax year. (Ignoring institutions which allow portfolio/split ISAs). You’ve added to that same ISA which is fine as all your current year subscriptions are within the same Cash ISA. 

Reed_Richards

amanwithaplan said:

I've done that and I've not found a post with the exact same issue, hence asking.

There are many many posts with the exact same issue.  In my opinion the problem is down to terminology and what "opening an ISA" actually means.  If you make an ISA transfer you certainly open a new ISA account but it is the same ISA money moved elsewhere.  So it's not a new ISA and you have not opened a new ISA, you have moved an old ISA somewhere else.