Multiple ISA's?

Algiboy

I’ve been following this thread, but now somewhat confused, and would like some advice, I have opened a Barclays Tax Haven ISA for 2008/9 with an opening balance of £10, I was then made aware of the better deal from my own bank LTSB which unlike Barclays allows transfers of other years ISA funds.
Can I now just close the Barclays account or will I be penalized in any way for opening more than one account?

Paul_Herring

Algiboy wrote: »

I have opened a Barclays Tax Haven ISA for 2008/9 with an opening balance of £10, I was then made aware of the better deal from my own bank LTSB which unlike Barclays allows transfers of other years ISA funds.
Can I now just close the Barclays account or will I be penalized in any way for opening more than one account?

You should transfer the account. LTSB can give you the form which you need to fill in to ask Barclays for the money.

You (normally) send this to the destination bank, they will then pass it on to the source bank.

jamesd

Paul_Herring,

Guidance Notes for PEP and ISA Managers:

"5.2 Before a manager can open an ISA, he must hold

• a valid application, which he has accepted (paragraphs 5.8 and 5.9), and
• a valid subscription (paragraphs 6.3, 6.6 – 6.12 and 6.19 – 6.34).

5.3 An ISA begins from the later of

• the date on which the ISA manager accepts the application form, and
• the date on which the subscription is made (paragraph 6.9).

The manager should record the date he accepted the application (which may not be before the date of application) in his records. This means that applications may be accepted before the tax year in which subscriptions can be made."

10_66 wrote: »

Once you've opened one with new funds (not transferred), even if it's with just £1 and even if you close it, you cannot open another in the same tax year and put £2,999 new funds (next tax year £3,499) into it. HMRC will close the second one.

On the incorrect claim that HMRC will close the second account for the amounts you specified, see the Guidance Notes for PEP and ISA Managers

"12.35 In general, the invalid subscriptions to the second ISA can be repaired to the extent that the total subscriptions in the tax year to the two ISAs do not exceed £7000, or £3000 for subscriptions to cash components (see paragraph 12.38). ...

For Example

Mr James subscribes £3000 to a stocks and shares maxi ISA with Candobank plc in 2005-2006. Later in the same tax year he subscribes £7000 to a stocks and shares maxi ISA with Megafund plc. None of the subscriptions are used to purchase insurance products. The subscriptions to the Megafund plc ISA are invalid but repairable. The total subscriptions are £10000, which exceeds £7000. The excess subscriptions of £3000 must be removed from the Megafund ISA, but the other £4000 subscriptions can be repaired."

HMRC will write to the second manager if and only if the subscribing/depositing limit has been exceeded and tell them to return the excess. In any case they will write to the consumer telling them about the breach of the rules and not to do it again.

10_66

Jamesd: Thanks for your post. I contacted HMRC Helpline some time ago regarding this matter to clarify this point, and was told by two different people that if you opened a Mini cash ISA in a current tax year with "new funds" (even if you only opened it with a £1), they would insist on the closure (and return of funds) of any second ISA that has been opened in the same year with the remaining allowance for that year. They said you can only transfer this year's funds.

sloughflint

Algiboy wrote: »

I’ve been following this thread, but now somewhat confused, and would like some advice, I have opened a Barclays Tax Haven ISA for 2008/9 with an opening balance of £10, I was then made aware of the better deal from my own bank LTSB which unlike Barclays allows transfers of other years ISA funds.
Can I now just close the Barclays account or will I be penalized in any way for opening more than one account?

Pardon me for butting in and questioning Paul's reply but this has similarities with my situation. Surely the £10 for 08/09 can't have been processed yet ( holding account maybe)? I'm guessing that this account is not fully open until 06/04 when the £10 can properly be deposited.
So surely in this scenario as long as they are notified pronto, Barclays can just return the £10 and you don't have to go through the transfer palaver for £10? A simple cancellation?

sloughflint

10_66 wrote: »

They said you can only transfer this year's funds.

My turn to find your post a little ambiguous. I think what you are meaning is that transfer is the only way to do things but I initially read your sentence differently:


You can transfer previous years too if you so wish.
However, if you want to transfer this year's funds then it must be the entirely of this year's funds.

That is right, isn't it?

Paul_Herring

jamesd wrote: »

• a valid application, which he has accepted

The point I've been trying to make is that people on this thread (and on other threads) are very strongly implying you cannot even make (in the terminology of your citation) more than one application per tax year.

Paul_Herring

sloughflint wrote: »

Pardon me for butting in and questioning Paul's reply but this has similarities with my situation. Surely the £10 for 08/09 can't have been processed yet ( holding account maybe)? I'm guessing that this account is not fully open until 06/04 when the £10 can properly be deposited.

Correct.

So surely in this scenario as long as they are notified pronto, Barclays can just return the £10 and you don't have to go through the transfer palaver for £10? A simple cancellation?

Indeed.

However it's so close to the new tax year I wouldn't leave anything to chance.

Bear in mind that this is the busiest time of year for ISAs - would you trust Barclays (or indeed any of the banks) not to screw up during those last few days. And get everything right?

10_66

sloughflint wrote: »

You can transfer previous years too if you so wish.
However, if you want to transfer this year's funds then it must be the entirely of this year's funds.

That is right, isn't it?

Yes, if you want to transfer the funds you have contributed into this year's ISA, you must transfer all of the funds in that ISA.

jamesd

sloughflint, yes, it must be all of the value of the particular type being transferred (cash or S&S) when it's for the current year. There is an exception when it's not possible to reliably determine just how much is for the current year and how much for past years, that mostly applies for S&S ISAs. Described further at section 11.15 in the 2008 version of the Guidance Notes for ISA Managers.

10_66, the helpline told you the correct rules. I just went a little further and described the repair process if they are broken, since it's not as bad as it seems. Things also become a bit more flexible from 6 Aptil 2008 in some ways. No surprise that the consumer helpline will give the consumer rules...

Paul_Herring, good to try to do that at this time of year since it's handy to let people know that they can apply now for next year so long as they don't deposit the money until the new tax year (assuming that they ahve used this year's allowance).