Confused - ISAs - One of the Banks talking nonsense it seems :/

jr941

Wow, I had to paste your paste to Google docs and then use the highlighter. I have read the message three times with the intention to comprehend it completely.

You stated:

''Based on this list, either Moneybox or Skipton BS would be the best options as these both permit transfers in from other types of ISA. You can transfer another £4k after 5th April and the rest the year after that.'''

I understand you said that I have plenty of time but should I immediately contact Skipton BS to get this done because:

I really don't want Natwest to report me to HMRC for breaching their condition. I was not aware of it. Is there a way I can minimise this reputational damage? I really don't want HMRC to perceive me as a dodgy person or something or get anything negative on my record.

Is it a good idea for me to inform Natwest about my aim to get this transfer done to put an end to the restriction enforced?

Or is there any way I can stop Natwest from badmouthing me to HMRC? I have a feeling that they have already reported the breach to the tax office. I hope I am wrong

masonic

jr941 said:

Wow, I had to paste your paste to Google docs and then use the highlighter. I have read the message three times with the intention to comprehend it completely.

You stated:

''Based on this list, either Moneybox or Skipton BS would be the best options as these both permit transfers in from other types of ISA. You can transfer another £4k after 5th April and the rest the year after that.'''

I understand you said that I have plenty of time but should I immediately contact Skipton BS to get this done because:

I really don't want Natwest to report me to HMRC for breaching their condition. I was not aware of it. Is there a way I can minimise this reputational damage? I really don't want HMRC to perceive me as a dodgy person or something or get anything negative on my record.

Is it a good idea for me to inform Natwest about my aim to get this transfer done to put an end to the restriction enforced?

Or is there any way I can stop Natwest from badmouthing me to HMRC? I have a feeling that they have already reported the breach to the tax office. I hope I am wrong

HMRC have no interest in hearing about potential ISA breaches until after the tax year is over, because providers aren't in possession of all of the facts and therefore cannot be relied on. Customers may not fully comprehend the situation either. Here is the guidance HMRC provides ISA managers like Natwest:

https://www.gov.uk/guidance/close-void-or-repair-an-isa-if-youre-an-isa-manager#repair-void

So HMRC itself gathers information from all providers after the end of the tax year. Natwest, Co-op, Skipton etc will all let HMRC know details of the ISAs it has opened for customers including what 2023/24 contributions they are holding in those ISAs. It is then for HMRC to gather all of that information and decide if there have been any breaches. Only if HMRC finds something out of place is there any risk of them gathering information from the providers about what has happened.

There is no need to tell Natwest what you are going to do - they will find out soon enough, but you don't need to hide it from them either. Skipton will handle the transfer from Natwest, so there isn't really any need to have further contact with Natwest at all.

The transfer will have the effect that you'll have been treated as not having paid anything into the HTB ISA in this tax year, so Natwest will just report that you have a HTB ISA that you haven't paid into. Here's HMRC's guidance on this:

https://www.gov.uk/guidance/transfer-an-isa-if-youre-an-isa-manager#what-amounts-can-be-transferred

Meaning that Skipton will report the 'new money' £1,800 as having been made to the Lifetime ISA instead. You can pay into a cash ISA (like your Co-op fix) and a Lifetime ISA in the same tax year, so all will be well as far as HMRC is concerned. This is why it is important to tick the box on the transfer form stating that the transfer should include money paid in during the current tax year as this is the most important money to make sure is moved out of the HTB ISA.

jr941

You stated:

''There is no need to tell Natwest what you are going to do - they will find out soon enough, but you don't need to hide it from them either. Skipton will handle the transfer from Natwest, so there isn't really any need to have further contact with Natwest at all.''

Is there a way, I can contact Skipton tomorrow and get everything done? If the transfer needs to initiate after a certain date, can I state that in the form and get this nightmare of a task completely out of my 'things to do' list?

You stated:

''This is why it is important to tick the box on the transfer form stating that the transfer should include money paid in during the current tax year as this is the most important money to make sure is moved out of the HTB ISA.''

I have looked this up and to my understanding I need to do the following:

''

Transferring your Help to Buy ISA to our Online Cash Lifetime ISA (LISA)

If you think a Cash LISA may be a better option for you then you could transfer the funds from your Help to Buy ISA into our Skipton LISA in three easy steps:

1. Apply for our Online Cash Lifetime ISA online.
2. Once set up, login, click ‘pay in’, select ‘ISA transfer in’.
3. Fill out the electronic form, print and return it to us in the post to the following address Customer Delivery, Skipton Building Society, The Bailey, Skipton, BD23 1DN.

Please note: Any transfer from a Help to Buy ISA will count towards your current tax year's LISA allowance of £4,000.

Plus there is an exclusive offer of £250 cashback for any of our LISA customers who go on to take out a mortgage with us. Please see the terms and conditions below.''

Can I really do the above tonight or tomorrow or do I need to wait for the Natwest ISA to close first? The signed closure letter was probably posted by Natwest branch I visited on Friday. 

My biggest fear for now is a negative response from there. It was definitely within the cooling off period when the letter was sent. However, by the time they are going to receive the letter, it will definitely be crossing the 14 day period.

Thank you for everything once again everyone! You all remind me of Jesus. So helpful!!!

eskbanker

jr941 said:

You stated:

''There is no need to tell Natwest what you are going to do - they will find out soon enough, but you don't need to hide it from them either. Skipton will handle the transfer from Natwest, so there isn't really any need to have further contact with Natwest at all.''

Is there a way, I can contact Skipton tomorrow and get everything done? If the transfer needs to initiate after a certain date, can I state that in the form and get this nightmare of a task completely out of my 'things to do' list?

You can open a Lifetime ISA with Skipton at any time, and initiate the transfer - there's no reason that I can see why it would need to be after a certain date.  However, there's no need to rush things - a bit of 'measure twice and cut once' in the first place would undoubtedly have helped!

jr941 said:

You stated:

''This is why it is important to tick the box on the transfer form stating that the transfer should include money paid in during the current tax year as this is the most important money to make sure is moved out of the HTB ISA.''

I have looked this up and to my understanding I need to do the following:

''

Transferring your Help to Buy ISA to our Online Cash Lifetime ISA (LISA)

If you think a Cash LISA may be a better option for you then you could transfer the funds from your Help to Buy ISA into our Skipton LISA in three easy steps:

1. Apply for our Online Cash Lifetime ISA online.
2. Once set up, login, click ‘pay in’, select ‘ISA transfer in’.
3. Fill out the electronic form, print and return it to us in the post to the following address Customer Delivery, Skipton Building Society, The Bailey, Skipton, BD23 1DN.

Please note: Any transfer from a Help to Buy ISA will count towards your current tax year's LISA allowance of £4,000.

Plus there is an exclusive offer of £250 cashback for any of our LISA customers who go on to take out a mortgage with us. Please see the terms and conditions below.''

Can I really do the above tonight or tomorrow or do I need to wait for the Natwest ISA to close first?

The transfer of £4K (including your current year money) from the NatWest HTB ISA to the Skipton LISA is entirely unrelated to the cancellation of the other NatWest cash ISA.

jr941 said:

The signed closure letter was probably posted by Natwest branch I visited on Friday. 

My biggest fear for now is a negative response from there. It was definitely within the cooling off period when the letter was sent. However, by the time they are going to receive the letter, it will definitely be crossing the 14 day period.

Hopefully the right wording was used, to cancel the account, not simply close it?  It's an important distinction....

If you notified them in branch within 14 days, then any postal delay thereafter is their issue, not yours:

You can cancel your Fixed Rate ISA within 14 days from the date of account opening, or the date you received the Terms and Information Sheet if that is later by writing to your branch (see natwest.com/branch to find your local branch address). You can post your written notice or hand it in.

jr941

Omg I wrote:

Please close Fixed rate ISA account and transfer the money to my savings account (with both the account details)

I also mentioned that it's still within the cooling off period. My full name, address and date were also mentioned.

Is the cooling off period insufficient to make them understand how they need to process this?

I am reading more about the Lifetime ISA of Swinton as advised.

Thanks 🙏

jr941

While reading about the Life time ISA of Skipton, I have noticed I am not eligible:

Lifetime ISA
Who can open an account?	Anyone aged 18 to 39

I am 40

Does all lifetime ISAs have this age restriction?

eskbanker

jr941 said:

Omg I wrote:

Please close Fixed rate ISA account and transfer the money to my savings account (with both the account details)

I also mentioned that it's still within the cooling off period. My full name, address and date were also mentioned.

Is the cooling off period insufficient to make them understand how they need to process this?

You'd need to ask them whether they treat 'closure within cooling-off period' as the same thing as 'cancellation' - the latter reverses the opening/funding process as if it never happened, thereby reinstating the relevant amount of your annual allowance and not reporting the account's existence to HMRC, whereas the former doesn't achieve this.  

jr941 said:

While reading about the Life time ISA of Skipton, I have noticed I am not eligible:

Lifetime ISA
Who can open an account?	Anyone aged 18 to 39

I am 40

Does all lifetime ISAs have this age restriction?

Yes, it's a standard restriction of the product, so if you're ineligible because of age then that's unavoidable.

You must be 18 or over but under 40 to open a Lifetime ISA.

https://www.gov.uk/lifetime-isa

jr941

Wow, is there no way out for me then? Is there any other ISA which I can opt for to free myself from the Natwest's Help to Buy's restriction?

Thanks!

eskbanker

jr941 said:

Wow, is there no way out for me then? Is there any other ISA which I can opt for to free myself from the Natwest's Help to Buy's restriction?

There isn't a NatWest HTB ISA restriction as such, it's the overall ISA scheme rules that you've fallen foul of if you've paid into multiple cash ISAs with different providers.

If your net position after cancelling/closing the non-HTB NatWest ISA is that you have (<£20K of) current year money in cash ISAs with two separate providers, then this is against the rules, but, as covered extensively already, it's unlikely that there'd be any sanction, and, as the definite disadvantages associated with any further corrective action would outweigh those of any potential sanction, doing nothing would seem the most realistic option.

jr941

Once the Natwest fixed deposit ISA is closed and the £1001 is transferred back to one of my regular savings accounts, then I will be within my allowance of 20 k.

To my understanding, Natwest Help to Buy ISA's restriction is that I cannot have a Cash ISA with any other bank with money in it. It can only be with them, not any other provider   In my case, it is with Co-Op, so to my understanding this is the breach. Isn't Natwest going to badmouth me to HMRC for sure now, as I really don't have a fix to this? I am not eligible for Lifetime ISA. Other Help to Buy ISAs of other providers no longer exists

This is such a painful experience. Instead of doing something productive, I have just hurt myself. 

Thank you for all your guidance once again!