ISA rules have changed Discussion

jamesd

strangeglue, you have deposited 100 so you can deposit another 3500 regardless of what you withdraw, since withdrawing money doesn't count.

pi1an0player, still scope in a stocks and shares ISA for tax benefits from holding fixed interest investments that don't have to pay tax on their interest in the ISA but do if outside it. With the anticipated yield for one Invesco Perpetual monthly fund at more than 7.5% this year and a prospect of capital growth that's not bad going. Not as low risk as savings accounts though.

strangeglue

King_Weasel wrote: »

You've done nothing wrong (unless maybe you failed to look for the best offers, but you can transfer any time). Your withdrawals are irrelevant. You've put £100 in this year, so you've only got another £3,500 you can put in this year.

[PS What's the significance of your nic? Something to do with Stickies, presumably.]

Thank you both - that makes so much more sense now.

And I know smile isn't the best offer, but I really like them, and they were super when my account was frauded, so I'm a tad loyal.

p.s the nic is a catatonia song that i started using way back when, before cerys went into the jungle and ruined it for me!

Milarky

[Useful Thread BLF]
I've got paperwork from Bath B/Soc and the terms and conditions state that only full transfers out are permitted. They also informed me by email that transfers-in are accepted but as I don't have transfer in form I don't know if these are also limited or not (so I'll email them for any form)

andy1988

Hi, I'm wondering if you could help me on a few (5) points regarding ISA regulations please?
I have contacted Barclays, Icesave, NatWest and NS&I with these questions over the past 2 years but have not received one definite answer, if anyone could help it'd be appreciated...
1) How many cash ISA's may I have? Most companies tell me 2 is the limit but I can setup a new one each year, so I presume I'm at my limit now with an ISA with Icesave and Barclays, or can I setup a 3rd in 09/10 with a new company (and retain my current ISA's), so after 10yrs of ISA openings would I still be unable to have more than 2 ISA’s to my name, or could I have 10?
2) Is there a physical block to my putting £3,600 into both my Barclays and Icesave ISA's (total cash deposit of £7,200) in the same tax year, or is it a matter of getting caught?
3) May I have more than 1 ISA with the same company?
4) The trickiest question to ask...I currently have the Barclays Tax Haven ISA with a 1yr bonus, at the end of this (May 2009) the rate will drop to 5.x% so I obviously want out, will I be able to setup a new ISA (for tax year 09/10) and transfer the balance of the Barclays account over and then deposit a further £3,600 into that account? For example, I max out the Barclays ISA this year (3.6k), then transfer it to a NatWest one then deposit a further £3,600 once the transfer clears, with an effective balance of £7,200?
5) Follow on from Q4…can I combine two ISA’s into one, i.e. transfer both my Icesave and Barclays account into a single ISA next year with an initial balance of £7,200 then deposit £3,600 more, or aren’t they combinable?

I hope I've made the above clear; I'd appreciate any help/advice you can provide, either in the forum or via PM if I'm not making sense.

Thanks very much,
Andy

Lokolo

Easy Peasy!

1) You can have as many as you like. You can only contribute new money to one ISA. After 10 years you can have 10 ISAs with money in them. (you could obviously open another 5 or something and have £0 in, but not much point in this!).

2) Matter of getting caught, but if you get caught, you lose out and you are unlikely to get given an ISA again (they use your NI number).

3) Yes although not much point (say one gives 5%, one gives 6%, you really want both monies in the 6%!)

4) Yes, but make sure you transfer by an ISA transfer form and not like BACS or anything. It can take around 30 days for this to happen so make sure you plan ahead (i.e. about a month and half before Barclays bonus runs out, thats when you want to be opening another).

5) Yes, this is what you ideally want to do, as above, no point having 1 ISA at 4%, one at 5%, one at 7%. You may as well shove all the money in the 7% one by ISA transferring.

jamesd

1. You can have an unlimited number of ISAs of each type that hold money from prior years. 1,000 is fine if you can find that many providers and if they will accept partial transfers of money from wherever it is before the transfer.

Each year you can only pay money into on active cash ISA or S&S ISA at a time. You can transfer all current year money for that type of ISA from one account to another and continue making payments into the new one up to the point that the total payments into them combined reaches the annual limit. You can transfer any amount of cash from a current year cash ISA to a S&S ISA and it stops counting against the cash limit and starts counting against the S&S limit. So you can put in 3600 cash, transfer it to a S&S ISA and put in another 3600 cash if you like. You can transfer an unlimited amount of money from past year cash ISAs to S&S ISAs. You can't transfer from S&S ISA to cash ISA.

2. ISA providers report to the government and the checks are automatic and effective. Your mistake will be discovered. Once and once only, for now and the rest of your life, it's quite likely to be ignored. If not ignored, the second account money that exceeds the limit will be voided and you'll lose the tax benefit. You'll get the money back, probably without any interest. There's no physical limit or real time checking between providers, so this will happen a year or more after the event.

3. You can have as many as the company will let you have. No limit except for the current year when it's one of each type (cash or S&S).

4. Yes, just be sure to use a transfer form, not withdraw and redeposit.

5. Yes, just be sure to use a transfer form, not withdraw and redeposit.

Some accounts won't accept transfers in so for a specific account you'll have to check that it will. It's common for accounts offering unusually high rates to not accept transfers in of money from past years. This restriction is from the account provider, not from the ISA rules.

andy1988

Thanks very much! That's a great help, I've no idea why the banks wouldn't just tell me straight.
Thanks again, Andy

Night_Owl_2

In May this year my O/H and I have each opened a Cash ISA with HSBC where we have a joint basic bank account.
Yesturday I found out online that the money I had paid into my ISA has been transfered back into our bank account!!! No letter of explanation why.
Today I was told in branch that if we have a basic bank account we cannot hold an ISA savings with that bank!!! I was told that a letter will follow soon.
I was told that I could go to any other bank and open a new one though!!!!
I can't find anything documented in HSBC's terms and conditions to say that we cannot open an ISA.

1. Why weren't we told in branch that this is not possible?
2. Why has mine been transfered and my husbands is still open?
3. Is this wrong information from the Bank?

Help please.
Night Owl

Murdell_Smith

stphnstevey wrote: »

As this point is new for this coming tax year, thought I would clarify something that I wasn't sure on till checked myself and others might also be wondering

From HMRC website:

---

Q. How much can I transfer from my cash ISA to a stocks and shares ISA?

A. You can transfer some or all of the money you have saved in previous tax years without affecting your annual ISA investment allowance.

---

So I guess you could invest
a) Your previous years cash investments (provided you haven't withdrawn them already!)
b) £7200 of this coming tax yrs allowance

So there could be some very big investments in the stock market this April !

With that in mind, would it be better to invest in April or a month or so after April? - bearing in mind that if everybody is able to invest more than their normal £7k limit, this would push prices up?

Question: OK,this is quite a learning curve for me,but nothing venture...... so,
Hi Martin,

Firstly, thank you for providing the website, to allow total financial novices like to make some headway in understanding what they are doing with their money.

I am taking this article one step at a time. I frequently have to return to an article in my efforts to improve my understanding.
This week, this is the first section that has my attention, and I am worried. My sister and I had originally brought the house together. Since we both found ourselves divorced and deeply in debt, we re-mortgaged in September 1995 to clear our accumulated debts. I wanted to finance a new career in teaching too and she had a baby on the way. She lost her baby and needed some care until she ‘got back on her feet’ as the saying goes. So we were now both looking at new studies for new careers. We didn’t just want the money left after clearing our debts to just be frittered away foolishly so we tried to find some means of saving the £10 000 hoping to get a sensible return on it. Well after a year we were dealing with a variable mortgage rate so we used up£3 000 from the Corporate Bond Fund. We then put the £7 000 in to a cash ISA with same company – Halifax. What returns we had were used to help see us through that very rough patch.

However, the value of our original £7 000 has dropped and keep dropping. We simply don’t understand. We thought any return would be on top of the £7 000. The latest details we have shows the investment is now only worth just over £5 000.

We are asking you for help because we don’t know who else to ask and get an answer that makes sense to us. Each time we have been to see the financial advisor- a lovely man- in a state of utter panic, needing some urgent money, he explains that we can withdraw the money. But we don’t want to do this when we have lost so much already. And even if we did withdraw it we don’t understand where in the financial world we can put it and make a profit or at least come out with the same amount we originally put in. And if there is protection, how can we be protected when we are already losing money? Help!

Poppyfields5

Hi

Many, many years ago a PEP was opened for me... think I may have had something to do with, but it was always in the background and I never gane much thought to it. Anyway.. I've found out this has changed to a Stock and shares ISA.

I've just opened a cash ISA with the full deposit of £3600. The pep has over £7000 in it..... is this classed as a new ISA? Surely this is unfair if so.... and what happens to my new cash ISA. I took it out in good faith.. not realising the other had become an ISA.

Can anyone shed some light?

Thanks in advance