ISA question - opening two accounts in same tax year

masonic

flaneurs_lobster said:

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?

The best way to frame this is that you've transferred it, but it is still the same ISA in HMRC's eyes. Very much in the same vein as Reed's explanation above.

flaneurs_lobster

Reed_Richards said:

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. 

You are absolutely right. Even you speak of "a new ISA account" (a new IS account account) where the ISA itself is the same ISA. Throw in what is meant by "new subscriptions" and wonder why people (me) get a tad confused.

So in my case I have paid into two different ISA accounts in the same tax year but these monies have always been in a single ISA wrapper, a notional "Lobster's ISA 23/24"?

masonic

flaneurs_lobster said:
So in my case I have paid into two different ISA accounts in the same tax year but these monies have always been in a single ISA wrapper, a notional "Lobster's ISA 23/24"?

Yes, you could reduce ISA accounts to the following: NINO-Type-TaxYear, all 2023/24 ISAs reported to HMRC at the end of the tax year must be unique. ISAs for any other tax year can be multiple. From 6th April, none need to be unique.

flaneurs_lobster

masonic said:

flaneurs_lobster said:
So in my case I have paid into two different ISA accounts in the same tax year but these monies have always been in a single ISA wrapper, a notional "Lobster's ISA 23/24"?

Yes, you could reduce ISA accounts to the following: NINO-Type-TaxYear, all 2023/24 ISAs reported to HMRC at the end of the tax year must be unique. ISAs for any other tax year can be multiple. From 6th April, none need to be unique.

Thanks for that. Just to confirm another ISA (no doubt) FAQ. I started the 23/24 year with £10K in a flex ISA. I have withdrawn £3K, so that at maturity I have transferred £7K to a new (fixed) ISA. Could I now fund this ISA with £23K and still be within deposit limits?

masonic

flaneurs_lobster said:

masonic said:

flaneurs_lobster said:
So in my case I have paid into two different ISA accounts in the same tax year but these monies have always been in a single ISA wrapper, a notional "Lobster's ISA 23/24"?

Yes, you could reduce ISA accounts to the following: NINO-Type-TaxYear, all 2023/24 ISAs reported to HMRC at the end of the tax year must be unique. ISAs for any other tax year can be multiple. From 6th April, none need to be unique.

Thanks for that. Just to confirm another ISA (no doubt) FAQ. I started the 23/24 year with £10K in a flex ISA. I have withdrawn £3K, so that at maturity I have transferred £7K to a new (fixed) ISA. Could I now fund this ISA with £23K and still be within deposit limits?

No.

If the £10k was paid in at the beginning of the 23/24 year, £10k - £3k + £23k = £30k. The annual allowance is £20k.

If the £10k was paid in prior to the start of the 23/24 year, the flexible withdrawal makes no impact on this year's allowance and the £3k replacement subscription allowance is lost upon transfer. You would have needed to replace it before transferring in order to preserve it.

flaneurs_lobster

masonic said:

flaneurs_lobster said:

masonic said:

flaneurs_lobster said:
So in my case I have paid into two different ISA accounts in the same tax year but these monies have always been in a single ISA wrapper, a notional "Lobster's ISA 23/24"?

Yes, you could reduce ISA accounts to the following: NINO-Type-TaxYear, all 2023/24 ISAs reported to HMRC at the end of the tax year must be unique. ISAs for any other tax year can be multiple. From 6th April, none need to be unique.

Thanks for that. Just to confirm another ISA (no doubt) FAQ. I started the 23/24 year with £10K in a flex ISA. I have withdrawn £3K, so that at maturity I have transferred £7K to a new (fixed) ISA. Could I now fund this ISA with £23K and still be within deposit limits?

No.

If the £10k was paid in at the beginning of the 23/24 year, £10k - £3k + £23k = £30k. The annual allowance is £20k.

If the £10k was paid in prior to the start of the 23/24 year, the flexible withdrawal makes no impact on this year's allowance and the £3k replacement subscription allowance is lost upon transfer. You would have needed to replace it before transferring in order to preserve it.

Thank-you, it was the latter. That's annoying, if I'd realised that I would have replaced the £3k the week before maturity. Lesson learnt.

aphty

Hi 
I have some money that I would like to add to a Cash ISA this month but have confused myself with the 20k allowance rule over 2 separate tax years - hope someone can help.
A. I opened a 1 year fixed rate Shawbrook Cash ISA this tax year and deposited 11k to it in September 2023. I believe I am not allowed to open and deposit funds to a new second Cash ISA  this tax year with Shawbrook or any other provider? However can I simply deposit an additional 9k to the existing ISA to use up the allowance? (The website states that that product was withdrawn in October 2023).
B. I also opened a 1 year fixed rate Shawbrook Cash ISA last tax year and deposited 6k to it in March 2023. (It matures in March 2024 and the the website states that that product was withdrawn in March 2023). In theory could I deposit an additional 14k this month to that ISA to retrospectively make full use of last tax year's allowance?
Is either A. or B. or both A. and B. allowed under the rules?
Thanks

eskbanker

aphty said:

Hi 
I have some money that I would like to add to a Cash ISA this month but have confused myself with the 20k allowance rule over 2 separate tax years - hope someone can help.
A. I opened a 1 year fixed rate Shawbrook Cash ISA this tax year and deposited 11k to it in September 2023. I believe I am not allowed to open and deposit funds to a new second Cash ISA  this tax year with Shawbrook or any other provider? However can I simply deposit an additional 9k to the existing ISA to use up the allowance? (The website states that that product was withdrawn in October 2023).
B. I also opened a 1 year fixed rate Shawbrook Cash ISA last tax year and deposited 6k to it in March 2023. (It matures in March 2024 and the the website states that that product was withdrawn in March 2023). In theory could I deposit an additional 14k this month to that ISA to retrospectively make full use of last tax year's allowance?
Is either A. or B. or both A. and B. allowed under the rules?
Thanks

The current ISA scheme rules require that all of your current tax year cash ISA contributions are in the same ISA, so in theory the scheme rules would permit you to fund the 2023/24 one but not the 2022/23 one (there's no concept of 'backdating' contributions to a previous year).  However, Shawbrook's own product terms may not allow funding after the product is withdrawn, thereby eliminating that option.

You could perhaps fund a stocks and shares ISA with your residual allowance, leaving it uninvested or in low risk investments, and transfer that to a cash ISA once the new tax year kicks in?

aphty

Many thanks eskbanker - I will indeed attempt to add more funds to the 2023/24 ISA and then consider the low risk stocks and shares ISA option

eskbanker

aphty said:

I will indeed attempt to add more funds to the 2023/24 ISA

I just checked the Ts & Cs of their existing product and if yours are the same then you should be in luck:

If the product is withdrawn, you can continue to put more money into your account until the expiry of the fixed term.

https://www.shawbrook.co.uk/media/5995/1-year-fixed-rate-cash-isa-bond-86.pdf