2024 multiple ISA rules

wmb194

TheBanker said:

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. 

Yes, and I've had at least one provider, Freetrade, and IIRC at least one other ask you to sign up to the same declaration but then a few weeks later send an email saying that its terms had been updated to reflect the new HMRC rules and it no longer applied.

It's nonsense, IMO it's just a timing error between the old and the new rules being reflected in financial institutions' T&Cs.

redpete

I've opened one ISA this FY where the Ts&Cs clearly state that you can't have more than one of the same type, when I checked with them directly they admitted that the wording is out of date and I could safely ignore it. Unfortunately I can't remember which institution it was.