Full ISA Guide Discussion Area

Doc_N

Quick question - am I right in saying that I can, unusually, make payments to a second ISA provider in the same tax year if it's after a transfer from the original provider to the second provider?

Consumerist

Doc_N wrote: »

Quick question - am I right in saying that I can, unusually, make payments to a second ISA provider in the same tax year if it's after a transfer from the original provider to the second provider?

If you have transferred your current year's ISA to another provider then you can continue to contribute to it up to the current-year limit (£20,000).

If, on the other hand, you have transferred a previous year's ISA to another provider then you cannot make further contributions to it.

Hope I've understood the question correctly.

Doc_N

Thanks - you have.

I've transferred several years across and I'm wanting to add to this year's. There's a slightly oddly worded declaration to sign before adding any further contributions and it suggests that it's against the ISA rules.

Didn't seem right and you've kindly confirmed that.

Alexland

It's the same ISA you are just transfering it between providers.

geoff2

The Guide states "You must save or invest by 5 April - the end of the tax year - for it to count for that year. Crucially, any unused allowance doesn't roll over- so if you don't use it, you lose it - forever. You'll get a new allowance the next tax year, but won't be able to contribute anything to the old ISA.".

This is suggesting you have to open a new ISA account every year. I'm sure that's not true. Can't you just carry on paying into the same one, with your new allowance of £20k?

eskbanker

geoff2 wrote: »

The Guide states "You must save or invest by 5 April - the end of the tax year - for it to count for that year. Crucially, any unused allowance doesn't roll over- so if you don't use it, you lose it - forever. You'll get a new allowance the next tax year, but won't be able to contribute anything to the old ISA.".

This is suggesting you have to open a new ISA account every year. I'm sure that's not true. Can't you just carry on paying into the same one, with your new allowance of £20k?

Yes, you can carry on paying into the same ISA from one year to the next, regardless of that poor wording, unless it's one of the fixed term products that only allow contributions within a narrow initial window. However, if it's a cash ISA then you should monitor regularly whether or not you can get better rates elsewhere, either within ISAs or in taxable accounts....

mullygrubber

If I transfer a Cash ISA from this year into Virgin's Flexible Cash ISA next month (new tax year) and I also open a new Cash ISA with another provider next month, does this mean that:

a) I can withdraw and replace money in my flexible ISA without being penalised
b) also pay into the new Cash ISA

in the next tax year? I am asking because I understand you can only pay into one Cash ISA in a year but with a flexible ISA, I wouldn't be "paying in" new money (strictly speaking).

Thanks in advance!

Alexland

mullygrubber wrote: »

If I transfer a Cash ISA from this year into Virgin's Flexible Cash ISA next month (new tax year) and I also open a new Cash ISA with another provider next month, does this mean that:

a) I can withdraw and replace money in my flexible ISA without being penalised
b) also pay into the new Cash ISA

in the next tax year? I am asking because I understand you can only pay into one Cash ISA in a year but with a flexible ISA, I wouldn't be "paying in" new money (strictly speaking).

Sorry for the delay I was hoping someone would reply who knows the Virgin products better. Still looking at their FAQ:

https://uk.virginmoney.com/virgin/isa/flexible-isa/

"How do I know if I've subscribed to my ISA?

In each tax year (6 April - 5 April) you can split your ISA allowance across four types of ISA (cash, stocks and shares, Innovative Finance and Lifetime ISA) but you can only subscribe to one ISA of each type.

If the money you have paid in, less the money you have withdrawn has been above £0 at any point in the tax year you will have subscribed to that ISA in the tax year. This means you can't subscribe to another ISA of that type in the tax year."

Essentially next tax year you would have a Virgin Flexible ISA containing contributions from the previous tax year(s) from which you can make withdrawals and then replace the money. As long as you always do the withdrawals before the replacement you will not have been considered to subscribed to the ISA within the tax year. As such you can subscribe to another Cash ISA for that year.

Alex.

Kurenka

First of all apologies if this has already been covered...

I currently have a Help to Buy ISA and I have a house purchase going through in the next month or 2.
If I pay into my H2B ISA in the 2018/19 Tax Year then close it, can I open a new ISA and start making payments into that in the same tax year, or would the fact that I've already paid into an ISA stop me from doing that even though it has since been closed?

mullygrubber

Alexland wrote: »

Sorry for the delay I was hoping someone would reply who knows the Virgin products better. Still looking at their FAQ:

https://uk.virginmoney.com/virgin/isa/flexible-isa/

"How do I know if I've subscribed to my ISA?

In each tax year (6 April - 5 April) you can split your ISA allowance across four types of ISA (cash, stocks and shares, Innovative Finance and Lifetime ISA) but you can only subscribe to one ISA of each type.

If the money you have paid in, less the money you have withdrawn has been above £0 at any point in the tax year you will have subscribed to that ISA in the tax year. This means you can't subscribe to another ISA of that type in the tax year."

Essentially next tax year you would have a Virgin Flexible ISA containing contributions from the previous tax year(s) from which you can make withdrawals and then replace the money. As long as you always do the withdrawals before the replacement you will not have been considered to subscribed to the ISA within the tax year. As such you can subscribe to another Cash ISA for that year.

Alex.

Hi Alex,

Apologies for the late reply. Thanks for your help with this! That makes sense.

I did look on the Virgin website but I seemed to have missed what you just referenced. My bad!