What year is an ISA opened for tax purposes?

Woodbridge

I have used my full ISA allowance for 2024/25 and want to open a new fixed rate Cash ISA early in 2025/26. Providers are currently making upward tweaks to their rates to attract new funds, though these might fall once we move into the new tax year.
My question is: it within ISA rules to open another Cash ISA on or before 5th April but transfer funds into it from 6th April - subject to any limitations providers might impose, such as funds must be received within 14 days of opening an account? In other words, if I open another Cash ISA in 2024/25, but not invest funds until 2025/26, is it classified as a 2024/25 or 2025/26 ISA for deposit limit purposes?
If it is 2025/26, because that is when the funds are actually invested, perhaps more people ought to be aware that they can lock into an attractive fixed Cash ISA rate now rather than wait for the new tax year when rates might not be so attractive.

eskbanker

The annual £20K contribution limit relates to deposits made between 6 April one year and 5 April the next - account opening dates aren't relevant.

p00hsticks

eskbanker said:

The annual £20K contribution limit relates to deposits made between 6 April one year and 5 April the next - account opening dates aren't relevant.

From a quick look at best buy tables though, it's tricky to find a cash ISA that doesn't need an initial deposit of at least £1 to open it though....

masonic

p00hsticks said:

eskbanker said:

The annual £20K contribution limit relates to deposits made between 6 April one year and 5 April the next - account opening dates aren't relevant.

From a quick look at best buy tables though, it's tricky to find a cash ISA that doesn't need an initial deposit of at least £1 to open it though....

An ISA isn't considered opened until it is funded. That means that you can apply for an ISA on 1st April 2025, get an account number that same day, fund it a week later, and it will be a 2025/26 ISA.

Alternatively, almost any ISA that accepts transfers in can be opened with a transfer and no new money.

Woodbridge

Thanks for your replies.
After a bit of research, it seems this is not consistent across funders. For example, Principality BS have said any Cash ISA account opened next week but not funded by 5th April will be automatically closed - regardless of their funding instructions giving up to 5 working days to deposit money.
Coventry BS has confirmed there is a 14-day deposit requirement which will cross the two tax years while Virgin Money's website highlights that any funds received from 6th April for Cash ISAs opened now will be classified as 2025/26 transactions.
So, take care when trying to lock in a good Cash ISA rate now in an attempt to secure this for 2025/26. Things might not be straight forward.

Barkin

Woodbridge said:

Thanks for your replies.
After a bit of research, it seems this is not consistent across funders. For example, Principality BS have said any Cash ISA account opened next week but not funded by 5th April will be automatically closed - regardless of their funding instructions giving up to 5 working days to deposit money.

We're you told this by phone/email, because it seems contrary to their own account T’s&C's ?

eskbanker

Barkin said:

Woodbridge said:

Thanks for your replies.
After a bit of research, it seems this is not consistent across funders. For example, Principality BS have said any Cash ISA account opened next week but not funded by 5th April will be automatically closed - regardless of their funding instructions giving up to 5 working days to deposit money.

We're you told this by phone/email, because it seems contrary to their own account T’s&C's ?

I was curious about this too but it is in the Ts & Cs, for the one year fix anyway, albeit it says 'may' close rather than 'will':


https://www.principality.co.uk/getmedia/37cacaa7-1f08-4876-82d8-2e3069611f11/1-Year-Fixed-Rate-Cash-ISA-CSRISA1Y.pdf

Barkin

So it is. Missed that - my bad...

Bobblehat

This may be relevant to the conversation .... and I wonder if other providers also follow KR's policy?

Extracted from another thread on ISA sub-forum .....

masonic

As is becoming increasingly the case, some ISA providers layer seemingly pointless self-imposed restrictions over the ISA rules. HMRC explicitly made an exception for ISAs opened in one tax year to be funded in the next without requiring a new application. Then in April 2024 dropped the requirement for a fresh application for any missed years.

In the case of KRBS, I quick scan of their T&Cs reveal two terms containing factually incorrect information, the latter being the source of their strange policy:

https://www.kentreliance.co.uk/media/ywygeuxb/532_savings_terms_conditions_0618.pdf

Bobblehat

Whether factually incorrect or just a condition of being a customer of KRBS, opening their ISA in one tax year and not funding it until the following tax year risks a repeat of what soulsaver reported earlier. Whether they unilaterally close unfunded FT ISA's at the end of this tax year or not, we'll only find out too late!