2024 multiple ISA rules

ro1892

After reading this article (https://moneyweek.com/personal-finance/savings/isas/multiple-isa-rule-how-it-works) I have a query regarding the multiple ISA rules. 

I was under the impression that if I had opened a cash ISA in the tax year 2024/25 and paid in £10k then I could open another cash ISA with a different provider in the same tax year and pay in my remaining £10k allowance.

However according to the article not all ISA providers allow this, so do I need to ensure that both my ISA providers allow this? Why does it matter - if I have an ISA with provider 1 and open one with provider 2 I don't get why both providers would need to allow you to open multiple as my ISAs would be with different providers?

flaneurs_lobster

The regulations allow you to open as many cash ISAs in this tax year as you like.

Some providers allow you to have multiple ISAs with themselves.

Some providers only allow you to have a single ISA with themselves.

Some providers take this further and state that you may not have an ISA with any other provider.
You may choose to accept this condition and be bound by it.
You may choose to accept this condition and ignore it.
You may choose that you want multiple ISAs and not make a false declaration and take your business elsewhere.

ro1892

I want to stay within the rules and don't wish to make a false declaration.

Having looked at the T&C's of the cash ISA I have already opened this year it says:

I have not subscribed or made payments, and will not subscribe or make payments more than the overall subscription or payment limit in total to a cash ISA, a stocks and shares ISA, an innovative finance ISA, and a Lifetime ISA in the same tax year

I'm struggling to interpret that. Does it mean I can or can't open another cash ISA this year? It mentions about not going above the "overall subscription limit" (which would imply you could maybe have more than 1 cash ISA) but then says "a cash ISA" which would imply only 1 cash ISA?

Johnny-Cage

ro1892 said:

I want to stay within the rules and don't wish to make a false declaration.

Having looked at the T&C's of the cash ISA I have already opened this year it says:

I have not subscribed or made payments, and will not subscribe or make payments more than the overall subscription or payment limit in total to a cash ISA, a stocks and shares ISA, an innovative finance ISA, and a Lifetime ISA in the same tax year

I'm struggling to interpret that. Does it mean I can or can't open another cash ISA this year? It mentions about not going above the "overall subscription limit" (which would imply you could maybe have more than 1 cash ISA) but then says "a cash ISA" which would imply only 1 cash ISA?

From the HMRC rule for 2024 you can have multiple ISA’s for this tax year, you just can’t exceed the 20k limit. That’s the only rule you need to stick to.

If one of your ISA states you can’t have any other ISA elsewhere, they would never find out if you choose to ignore it and and you do open ISA’s elsewhere and legally your not breaking any HMRC rules. 

flaneurs_lobster

ro1892 said:

I want to stay within the rules and don't wish to make a false declaration.

Having looked at the T&C's of the cash ISA I have already opened this year it says:

I have not subscribed or made payments, and will not subscribe or make payments more than the overall subscription or payment limit in total to a cash ISA, a stocks and shares ISA, an innovative finance ISA, and a Lifetime ISA in the same tax year

I'm struggling to interpret that. Does it mean I can or can't open another cash ISA this year? It mentions about not going above the "overall subscription limit" (which would imply you could maybe have more than 1 cash ISA) but then says "a cash ISA" which would imply only 1 cash ISA?

I interpret that to simply mean that you will not add more than £20k of new money to your 1 or more ISAs this tax year.

Don't read it as any kind of prohibition on multiple new (this tax year) ISAs.

PRAISETHESUN

The issue isn't with the new ISA rules per se but with how the banks are implementing the new rules. Some simply don't care and still stick to their old ways whilst others are moving along with the times.

Whilst HMRC might not care if you make a false declaration but still abide by their rules, the banks might take issue if they ever found out, although I'm not really sure they have the ability to find out unless you tell them. Up to you if you want to breach a banks T&Cs and risk them doing anything about it.

ScarletBea

ro1892 said:

I want to stay within the rules and don't wish to make a false declaration.

Having looked at the T&C's of the cash ISA I have already opened this year it says:

I have not subscribed or made payments, and will not subscribe or make payments more than the overall subscription or payment limit in total to a cash ISA, a stocks and shares ISA, an innovative finance ISA, and a Lifetime ISA in the same tax year

I'm struggling to interpret that. Does it mean I can or can't open another cash ISA this year? It mentions about not going above the "overall subscription limit" (which would imply you could maybe have more than 1 cash ISA) but then says "a cash ISA" which would imply only 1 cash ISA?

This sounds like a good one, in that it only mentions the max subscription value, not number of ISA accounts, but the key are the T&Cs of the next one you want to open - if the above is from the first you opened, it doesn't really matter.

BuildTheWall

A lot of providers havent just updated the application process. Its a bit like finding a sticker that says you must wear masks when you enter a building. Always get the latest info from hmrc / gov websites.

400ixl

I don't read that as anything to do with restrictions on how many ISA's you can have with the provider you have quoted it from, just that the are taking responsibility to ensure the total you invest across your ISA's does not exceed the £20k limit.

They cannot see what you have invested elsewhere o pass that liability back to you.

TheBanker

PRAISETHESUN said:

The issue isn't with the new ISA rules per se but with how the banks are implementing the new rules. Some simply don't care and still stick to their old ways whilst others are moving along with the times.

Whilst HMRC might not care if you make a false declaration but still abide by their rules, the banks might take issue if they ever found out, although I'm not really sure they have the ability to find out unless you tell them. Up to you if you want to breach a banks T&Cs and risk them doing anything about it.

As you say, the bank are unlikely to ever find out that you have subscribed to another ISA. Even if they did they probably wouldn't care. But in the extremely unlikely event that they did try to do something, I think there's a strong argumant that such a condition is unfair and unenforcable. There is no valid reason for it to exist other than to stifle competition in the ISA market. But I think we agree this is purely an academic debate

And what could they actually do? They couldn't impose penalties unless these are set out in the agreement. They couldn't void the ISA as no HMRC rules have been broken. They couldn't apply CIFAS markers as there has been no attempt to defraud anyone (as fraud has to involve a benefit or gain). So all they could do is issue notice to close the account, in which case you could protect your ISA allowance by transferring it elsewhere during the notice period. From the bank's perspective that feels like cutting off ones nose to spite ones face. 

flaneurs_lobster

TheBanker said:

But I think we agree this is purely an academic debate

Academic but important I think. There is a more nuanced consideration - does an individual wish to make a false declaration, even knowing their falsehood will have no consequence?

Take a perverse example, a provider offers a savings product to people who are colour-blind (or over 5ft tall, or left-handed) and you must sign a statement that confirms your eligibility. Knowing that this declaration will never be verified would you still sign up if you are not qualified?