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Confused regarding fixed rate ISAs
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ClimbingSamurai
Posts: 7 Forumite

I am genuinely confused about what is and isn’t allowed, and it’s only just clicked that I may be doing something that is against the rules (or not).
Do fixed rate ISAs have the same status as an easy access cash ISA in the eyes of the tax man?
I opened up a 1 year fixed at the start of this tax year and put in a relatively modest amount & then a few months ago I opened up a 3 year fixed rate ISA , using funds from an old help to buy ISA.
Both amounts in the fixed accounts are just under 20k & presumably the amount I withdrew from my H2B ISA can be used as part of my allowance because it would be as if I’ve just transferred one ISA to another?
With both fixed ISAs presumably I will get the interest upon maturity and I haven’t been contacted by HMRC or the banks to say what I’m doing is wrong, so in the worst case what would happen? I’d just pay interest as if they were a taxable account?
As I’m below the 20k threshold for this year I may still be alright potentially?
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A cash ISA is a cash ISA and you can't pay into 2 different ones in a tax year. Even if it's under £20k you need to contact HMRC ISA helpline on 0300 200 3300 and they will instruct you.0
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If you transferred (using the proper ISA transfer process) from the HTB ISA that would be different to withdrawing the funds then putting them into a new ISA0
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ClimbingSamurai said:I opened up a 1 year fixed at the start of this tax year and put in a relatively modest amount & then a few months ago I opened up a 3 year fixed rate ISA
https://www.moneysavingexpert.com/savings/best-cash-isa/#accordion-content-620297425-5
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To the above ^ one of them is with one of those listed but the other account is a different provider unfortunately.
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And exactly how was the money moved from the HTB ISA to the three year fixed one, i.e. via a direct ISA transfer initiated via the receiving provider, or DIY via a non-ISA account?0
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eskbanker said:And exactly how was the money moved from the HTB ISA to the three year fixed one, i.e. via a direct ISA transfer initiated via the receiving provider, or DIY via a non-ISA account?0
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From the way you’ve described it, looks like you have subscribed to two different cash ISAs in the same tax year which is not allowed.
If you hadn’t withdrawn the HTB and just transferred it, you would have been alright but you have so it’s a new deposit.0 -
sparklymarkly said:From the way you’ve described it, looks like you have subscribed to two different cash ISAs in the same tax year which is not allowed.
If you hadn’t withdrawn the HTB and just transferred it, you would have been alright but you have so it’s a new deposit.0 -
ClimbingSamurai said:sparklymarkly said:From the way you’ve described it, looks like you have subscribed to two different cash ISAs in the same tax year which is not allowed.
If you hadn’t withdrawn the HTB and just transferred it, you would have been alright but you have so it’s a new deposit.1 -
BoGoF said:ClimbingSamurai said:sparklymarkly said:From the way you’ve described it, looks like you have subscribed to two different cash ISAs in the same tax year which is not allowed.
If you hadn’t withdrawn the HTB and just transferred it, you would have been alright but you have so it’s a new deposit.
Anecdotally, they'll typically forgive a 'first offender' who's paid a total of less than £20K into two cash ISAs (maybe even three if anything was contributed to the HTB ISA in the same tax year), but worst case is to declare the second ISA to be invalid and to treat the interest income as taxable.1
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