Easy ISA Question - advice please!!!

JohalaReewi

youreds wrote: »

Is that right? The A&L terms say you can't subscribe to another cash ISA, but if you're transferring in you aren't subscribing - is that right? I want to transfer last years Barclays tax buster to A&L, then open a Barclays Tax haven & deposit £3600.

Youreds!

I was looking at doing the same myself but the A&L T&Cs say that you are opening a cash ISA for 08/09. Having opened the ISA you can then transfer in from other ISAs but technically it prevents you opening a cash ISA for 08/09 with anyone else.

I double checked and according to HMRC that is right. If you open a cash ISA for the 08/09 year you can't open another one even if you don't pay into the first one. So basically, A&L seem to be saying sure you can transfer past ISAs into our ISA but we have got you for this year as well.

Lokolo

JohalaReewi wrote: »

I was looking at doing the same myself but the A&L T&Cs say that you are opening a cash ISA for 08/09. Having opened the ISA you can then transfer in from other ISAs but technically it prevents you opening a cash ISA for 08/09 with anyone else.

I double checked and according to HMRC that is right. If you open a cash ISA for the 08/09 year you can't open another one even if you don't pay into the first one. So basically, A&L are saying sure you can transfer past ISAs into our ISA but we have got you for this year as well.

Surely this defeats the whole point of the rules? From what I have learnt on here you can open as many as you want but only put new money into one account ISA. And you can open another one and tranfer existing ISAs into this one - for example, the Barclays one you can't transfer in, so you put n ew money in this one, open a Lloyds fixed rate ISA and transfer £12k (example) from previous ISAs into this.

Surely a bank can't overule this?

JohalaReewi

Lokolo wrote: »

Surely this defeats the whole point of the rules? From what I have learnt on here you can open as many as you want but only put new money into one account ISA. And you can open another one and tranfer existing ISAs into this one - for example, the Barclays one you can't transfer in, so you put n ew money in this one, open a Lloyds fixed rate ISA and transfer £12k (example) from previous ISAs into this.

Surely a bank can't overule this?

I spoke to the HMRC helpline on 0845 604 1701 to clarify what the new rules are and the person there said that you can only open one cash ISA for 08/09. You can't open another even if you haven't paid anything into the first one. I did ask a few times in different ways and each time I got the same answer. I know it runs counter to what went on before so maybe Martin can get clarification on this?

Lokolo

JohalaReewi wrote: »

I spoke to the HMRC helpline on 0845 604 1701 to clarify what the new rules are and the person there said that you can only open one cash ISA for 08/09. You can't open another even if you haven't paid anything into the first one. I did ask a few times in different ways and each time I got the same answer. I know it runs counter to what went on before so maybe Martin can get clarification on this?

Are you sure you worded it right? I think its all a load of bull. Taken from HMRC website it says rules on transferring are not changing:

Q. Can I still transfer my cash or stocks and shares ISA held with one provider to another provider?

A. Yes. The rules on transferring like-for-like ISAs between providers are not changing.
For example, you can still transfer your cash ISA held with one provider to a different cash ISA provider, without affecting your annual ISA investment allowance.
You must ask the new cash ISA provider to arrange the transfer.
You must not withdraw the money and invest it in your cash ISA yourself, as it will count against your annual ISA investment allowance.

debbie42

JohalaReewi wrote: »

I was looking at doing the same myself but the A&L T&Cs say that you are opening a cash ISA for 08/09. Having opened the ISA you can then transfer in from other ISAs but technically it prevents you opening a cash ISA for 08/09 with anyone else.

Does it prevent you from moving all your current year's contributions to another provider though? They never used to class that as a "new" account, just as a transfer, so it was allowed.

JohalaReewi

Looking at the new ISA managers guide

http://www.hmrc.gov.uk/isa/isa-guidance-notes-2008.pdf

See chapter 4.

It would appear that you don't open an ISA but you 'subscribe'.

I was very specific when I phoned HMRC. I asked if I opened a cash ISA (with A&L) in 08/09 but didn't pay anything into it, could I open another cash ISA (with Barclays) and pay into that instead? The answer was no. I also asked about other scenarios (including transfer in) and the HMRC person said that applying for more than one cash ISA in the year was not allowed. Please ask HMRC yourselves and post the responses here.

JohalaReewi

debbie42 wrote: »

Does it prevent you from moving all your current year's contributions to another provider though? They never used to class that as a "new" account, just as a transfer, so it was allowed.

It doesn't provided you don't have to open an ISA for 08/09. For A&L, it seems that you have to open a cash ISA for 08/09 to be eligible for the transfer-in option. You can't just transfer in your previous years' ISAs.

JohalaReewi

Lokolo wrote: »

Are you sure you worded it right? I think its all a load of bull. Taken from HMRC website it says rules on transferring are not changing:

Q. Can I still transfer my cash or stocks and shares ISA held with one provider to another provider?

A. Yes. The rules on transferring like-for-like ISAs between providers are not changing.
For example, you can still transfer your cash ISA held with one provider to a different cash ISA provider, without affecting your annual ISA investment allowance.
You must ask the new cash ISA provider to arrange the transfer.
You must not withdraw the money and invest it in your cash ISA yourself, as it will count against your annual ISA investment allowance.

This is correct. The problem I have is the requirement that A&L have which is to open a cash ISA for 08/09 in order to allow the transfer in from previous years. According to HMRC, the opening of the A&L 08/09 cash ISA will prevent me opening a 08/09 cash ISA with Barclays (for this years cash).

Lokolo

JohalaReewi wrote: »

This is correct. The problem I have is the requirement that A&L have which is to open a cash ISA for 08/09 in order to allow the transfer in from previous years. According to HMRC, the opening of the A&L 08/09 cash ISA will prevent me opening a 08/09 cash ISA with Barclays (for this years cash).

To be quite honest, I would do as you want, and if they question you say that there wasn't anything in the HMRC changes page about transferring being a subscription.

I would only class an ISA as a subscription once you have started to pay new money in, which is what it was before the changes. This hasn't changed according to the 'list of changes' on the HMRC website so they can't have a go at you for it, you are just doing what you have done in the past.

JohalaReewi

Looks like the HMRC help person was wrong and things are as they were before.

http://forums.moneysavingexpert.com/showpost.html?p=10089293&postcount=191