New ISA rules April 2024

jameslester78

i have paid £500 into a ns&i isa this tax year. can i withdraw that and pay it into a halifax isa without affecting my subscriptions for the year (eg would it count as only 500 toward the 20000 limit or would it count as 2*500 = 1000)

i am aware i can do a transfer of current year subscriptions between providers, im just trying to understand how this works

eskbanker

jameslester78 said:

i have paid £500 into a ns&i isa this tax year. can i withdraw that and pay it into a halifax isa without affecting my subscriptions for the year (eg would it count as only 500 toward the 20000 limit or would it count as 2*500 = 1000)

i am aware i can do a transfer of current year subscriptions between providers, im just trying to understand how this works

If the NS&I ISA a flexible one, you can withdraw it and pay into another ISA alongside another £19,500, but if it's not flexible then you could only add £19,000 on top of the £500.

auser99

Carl13 said:

auser99 said:

auser99 said:

Carl13 said:

SP_57 said:

There is definitely confusion.  I've just tried to open a Shawbrook ISA whose declaration says you can only open one cash ISA per year (i.e. unchanged).  

I phoned and queried this and was told the changes were only proposed and didn't apply.  Needless to say I can't agree the declaration so can't open the account!

I have also tried to open a Shawbrook ISA (Was planning to use half of my allowance) but was concerned that their declaration states I would not open another Cash ISA this tax year which I was hoping to do. Rang them to query and was told they had not opted into the scheme / system. Rang another on-line bank and visited both Yorkshire Building Society & Lloyds and was told that Shawbrook was not applying the rules correctly (YBS did mention that a provider can say that a customer could only open 1 Cash ISA with them but that would not alter their options with other providers as long as the maximum saved was 20K over all products). I rang Shawbrook again this morning and was told the same thing even though I referred to HMRC's own newsletter aimed at the banking industry and when I asked how they would know if I opened an ISA later with another bank I was told ominously "We will know!!!" I mentioned the  conversations I had with other banks and the operator ignored it as if they were an island in the banking industry. I currently have a complaint on record in connection with the matter.

If we assume that a bank could opt out of the scheme and all banks did it then the new rules would be pointless and if a bank opting out would limit a customers options in investing later in the year as I described above then HMRC would have to know and list all providers who have opted out to avoid the risk that customers break the rules without knowing - Making ISAs more complex not less.  

Shawbrook seem to be answering a different question from what's being asked.
They can opt out of allowing more than 1 Cash ISA to be set up through themselves, but they surely have zero say in what you do elsewhere, or even be able to know what you've done.

@steveksullivan had a chat with another Shawbrook worker and I paste in his response below.

She was VERY CLEAR that Shawbrook are abiding by the new HMRC/ Government rules and that you CAN open as many cash ISAs with other providers as you like (as we know.....) The restriction is that you can't open more than one cash ISA with Shawbrook (which they are allowed to dictate ....)

As a follow-up to the above I thought I would call to see when my complaint would be resolved (And also hoping I might actually speak to someone who understood the new rules). The operator went away to speak to a senior colleague and "confirmed" the advice previously given. They had not opted in and that if I was to open an ISA with another provider Shawbrook would ask me to close the one with them even when the total amount invested over the two ISAs was 20K or less. I wait for their full, written reply.

It's worrying that they're doubling down on that, as I've put a certain amount with them in, but planned to go elsewhere for the rest.
How they think they can find out about another ISA provider I do not know though with data protection. They aren't HMRC.

Rexxx

eskbanker said:

jameslester78 said:

i have paid £500 into a ns&i isa this tax year. can i withdraw that and pay it into a halifax isa without affecting my subscriptions for the year (eg would it count as only 500 toward the 20000 limit or would it count as 2*500 = 1000)

i am aware i can do a transfer of current year subscriptions between providers, im just trying to understand how this works

If the NS&I ISA a flexible one, you can withdraw it and pay into another ISA alongside another £19,500, but if it's not flexible then you could only add £19,000 on top of the £500.

Quick question here, I opened an account at 5pc with Principality which is flexible. I always thought flexible ISA's and their replacement allowances referred to withdrawing money and putting it back into the same place.

If I withdraw from Principality and put it into a S&S ISA or a higher paying rate Cash ISA later, will this avoid me using up my ISA allowance even if the funds are paid in elsewhere?

The reason I ask, is that AJ Bell have told me they won't be doing partial transfers of current years subscriptions, even though the rules now allow for it.

eskbanker

Rexxx said:
I always thought flexible ISA's and their replacement allowances referred to withdrawing money and putting it back into the same place.

Withdrawals of current year subscriptions, can effectively be replaced in any current year ISA.

[...]

Replacement of flexible ISA previous year funds must be made to the account from which the withdrawal was made, and in the same tax year.

https://www.gov.uk/guidance/manage-isa-subscriptions-for-your-investors#flexible-isas

The_Green_Hornet

auser99 said:

Carl13 said:

auser99 said:

auser99 said:

Carl13 said:

SP_57 said:

There is definitely confusion.  I've just tried to open a Shawbrook ISA whose declaration says you can only open one cash ISA per year (i.e. unchanged).  

I phoned and queried this and was told the changes were only proposed and didn't apply.  Needless to say I can't agree the declaration so can't open the account!

I have also tried to open a Shawbrook ISA (Was planning to use half of my allowance) but was concerned that their declaration states I would not open another Cash ISA this tax year which I was hoping to do. Rang them to query and was told they had not opted into the scheme / system. Rang another on-line bank and visited both Yorkshire Building Society & Lloyds and was told that Shawbrook was not applying the rules correctly (YBS did mention that a provider can say that a customer could only open 1 Cash ISA with them but that would not alter their options with other providers as long as the maximum saved was 20K over all products). I rang Shawbrook again this morning and was told the same thing even though I referred to HMRC's own newsletter aimed at the banking industry and when I asked how they would know if I opened an ISA later with another bank I was told ominously "We will know!!!" I mentioned the  conversations I had with other banks and the operator ignored it as if they were an island in the banking industry. I currently have a complaint on record in connection with the matter.

If we assume that a bank could opt out of the scheme and all banks did it then the new rules would be pointless and if a bank opting out would limit a customers options in investing later in the year as I described above then HMRC would have to know and list all providers who have opted out to avoid the risk that customers break the rules without knowing - Making ISAs more complex not less.  

Shawbrook seem to be answering a different question from what's being asked.
They can opt out of allowing more than 1 Cash ISA to be set up through themselves, but they surely have zero say in what you do elsewhere, or even be able to know what you've done.

@steveksullivan had a chat with another Shawbrook worker and I paste in his response below.

She was VERY CLEAR that Shawbrook are abiding by the new HMRC/ Government rules and that you CAN open as many cash ISAs with other providers as you like (as we know.....) The restriction is that you can't open more than one cash ISA with Shawbrook (which they are allowed to dictate ....)

As a follow-up to the above I thought I would call to see when my complaint would be resolved (And also hoping I might actually speak to someone who understood the new rules). The operator went away to speak to a senior colleague and "confirmed" the advice previously given. They had not opted in and that if I was to open an ISA with another provider Shawbrook would ask me to close the one with them even when the total amount invested over the two ISAs was 20K or less. I wait for their full, written reply.

It's worrying that they're doubling down on that, as I've put a certain amount with them in, but planned to go elsewhere for the rest.
How they think they can find out about another ISA provider I do not know though with data protection. They aren't HMRC.

What is more worrying is that they have this incorrect statement on their website:

What is the 2024/25 cash ISA allowance?

...

You can invest your £20,000 allowance across multiple types of ISAs, such as a cash ISA and a stocks and shares ISA. But you can only fund one ISA of each type during each tax year, so you cannot invest in two cash ISAs in the same year.

You can therefore only open a Shawbrook Bank cash ISA this year if you have not invested in a new or existing cash ISA on or after 6 April 2024 ...

jimjames

Especially as that has clearly been amended to the current tax year

auser99

Had a very long winded call with Shawbrook.

They're sticking with the story about you CANNOT have 2 separate cash ISAs even across another bank.

I didn't really get an answer of how they would know you've funded elsewhere, as that's surely GDRP outside of HMRC's needs.

I thought i'd try and move a fixed bond I set up into the ISA - can't do that, no cooling off period for fixed bonds.
But there is a 14 day cool off for ISAs.

So the easiest route for me is probably going to be getting the money and interest out, then whacking the full 20k in elsewhere. Keep it sensible, as I don't want to do a S&S ISA would have been my only other option for the remaining 10k

auser99

Carl13 said:

auser99 said:

Carl13 said:

SP_57 said:

There is definitely confusion.  I've just tried to open a Shawbrook ISA whose declaration says you can only open one cash ISA per year (i.e. unchanged).  

I phoned and queried this and was told the changes were only proposed and didn't apply.  Needless to say I can't agree the declaration so can't open the account!

I have also tried to open a Shawbrook ISA (Was planning to use half of my allowance) but was concerned that their declaration states I would not open another Cash ISA this tax year which I was hoping to do. Rang them to query and was told they had not opted into the scheme / system. Rang another on-line bank and visited both Yorkshire Building Society & Lloyds and was told that Shawbrook was not applying the rules correctly (YBS did mention that a provider can say that a customer could only open 1 Cash ISA with them but that would not alter their options with other providers as long as the maximum saved was 20K over all products). I rang Shawbrook again this morning and was told the same thing even though I referred to HMRC's own newsletter aimed at the banking industry and when I asked how they would know if I opened an ISA later with another bank I was told ominously "We will know!!!" I mentioned the  conversations I had with other banks and the operator ignored it as if they were an island in the banking industry. I currently have a complaint on record in connection with the matter.

If we assume that a bank could opt out of the scheme and all banks did it then the new rules would be pointless and if a bank opting out would limit a customers options in investing later in the year as I described above then HMRC would have to know and list all providers who have opted out to avoid the risk that customers break the rules without knowing - Making ISAs more complex not less.  

Shawbrook seem to be answering a different question from what's being asked.
They can opt out of allowing more than 1 Cash ISA to be set up through themselves, but they surely have zero say in what you do elsewhere, or even be able to know what you've done.

@steveksullivan had a call with Shawbrook and wrote the below on another thread

She was VERY CLEAR that Shawbrook are abiding by the new HMRC/ Government rules and that you CAN open as many cash ISAs with other providers as you like (as we know.....) The restriction is that you can't open more than one cash ISA with Shawbrook (which they are allowed to dictate ....)

Thanks for this comment. I must have got 2 staff members who could or would not understand the scenario that I was putting forward (I wonder how many possible customers / money to be invested they have lost from what appears to a lack of training or understanding). I do see their declaration still includes the wording "I have not subscribed, and will not subscribe, to another Cash ISA in the same tax year that I subscribe to this Cash ISA; "

Having spoken to a an advisor, there were a few times she said "yes" when I said can I also set up a Cash ISA elsewhere, and it was only when I continually stressed that it was "in addition" to one with Shawbrook she then reverted to what other people have said.

Therefore, I suspect the other caller was told the wrong info by misunderstanding.

What a carry on.
For the sake of 4.70% instead of 4.91%, I'm going to Kent!

masonic

auser99 said:

Had a very long winded call with Shawbrook.

They're sticking with the story about you CANNOT have 2 separate cash ISAs even across another bank.

I didn't really get an answer of how they would know you've funded elsewhere, as that's surely GDRP outside of HMRC's needs.

I thought i'd try and move a fixed bond I set up into the ISA - can't do that, no cooling off period for fixed bonds.
But there is a 14 day cool off for ISAs.

So the easiest route for me is probably going to be getting the money and interest out, then whacking the full 20k in elsewhere. Keep it sensible, as I don't want to do a S&S ISA would have been my only other option for the remaining 10k

This is sadly the all-too-common situation we've seen from banks and building societies. Most of their staff do not understand ISAs. They should not be dispensing advice about them. We of this forum spend far too much time clearing up messes created by uninformed staff misadvising customers about their ISAs. It is better not to ask of them things that are beyond their capabilities. The rules are clear and I'd hate it for people to compromise when they do not need to.