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MSE News: New tax year means new Isa year

edited 30 November -1 at 12:00AM in ISAs & Tax-free Savings
10 replies 2K views
Former_MSE_HelenFormer_MSE_Helen
2.4K posts
edited 30 November -1 at 12:00AM in ISAs & Tax-free Savings
This is the discussion thread for the following MSE News Story:

" The new tax year starts today meaning everyone gets a new, tax-free £5,340 cash Isa allowance. But don't delay using it ..."
Read the full story:
New tax year means new Isa year


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Replies

  • ValorValor Forumite
    16 posts
    "You can open another account to transfer money from old Isas."

    This used to be true, but it seems that this year the banks have a new trick.

    When I tried to open a new ISA to transfer my old one into, I was forced to put £1 into it. This £1 forms part of my ISA Subscription, so this meant that:

    a) I couldn't do this in advance of April 6th (as my 2010/11 Subscription was full)
    b) I can't open two ISA's in the same tax year, as with this method both would be "subscribed" to, which I believe is against the rules.

    So the most profitable way for me to save used to be two ISA's, one at ~3.5% for new subscriptions, and one at ~3.0% for transfers, but this seems to no longer be the case.

    Now I'm forced to choose between leaving my old ISA at it's 0.5% rate and opening a new one at 3.5% (but no transfers) or opening a new one at ~3.0% and being able to transfer into it.

    I tried this with Santander and Halifax, both had this new £1 requirement.

    Have I gone mad this year? or have the banks just got a little bit cleverer?

    Cheers,

    Val.
    Full Disclosure: I'm an Analyst that has previously worked in the B2C Financial Sector (A&L, Santander), I currently work in the B2B Energy Sector (Centrica).

    All views expressed are mine alone, and do not represent the opinions or polocies of any company I work for (or have worked for in the past).
  • SystemSystem Forumite
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    I applied for my 2011-12 ISA yesterday, to get as much interest as possible for the tax year.

    I went for the NatWest e-ISA because it doesn't have an introductory bonus and pays interest monthly and you can transfer in funds from other accounts, and it is instant access. Interest starts at 2% AER rising to 2.5% AER when over £30K

    I know there are better interest rates, but they have introductory bonuses, or fixed terms with penalties for withdrawals (close account) or are with an organisation which I would not trust. (Satan...der) ;) so I went with the option that best fits my needs.
  • edited 7 April 2011 at 9:29AM
    SystemSystem Forumite
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    edited 7 April 2011 at 9:29AM
    Valor wrote: »
    This used to be true, but it seems that this year the banks have a new trick.

    When I tried to open a new ISA to transfer my old one into, I was forced to put £1 into it. This £1 forms part of my ISA Subscription, so this meant that:

    If you opened the ISA using an online application, then many of the banks have simplified the application form and you do have to enter a minimum of £1

    A.F.A.I.K. - you then complete the ISA transfer form (once the account paperwork arrives) and you do not need to deposit the £1 - hence you have not used up your allowance and can open another account.

    This is what I was informed when I asked the bank's online chat.
  • NiksanNiksan Forumite
    309 posts
    Odd, I opened an ISA with Halifax on the 5th and didn't need to fund it, I would however need to fund it to get the big rate, then again, with nothing in it, it doesn't really matter what the rate is. Unless I'm missing something?
  • LeothecatLeothecat Forumite
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    Valor wrote: »
    This used to be true, but it seems that this year the banks have a new trick.

    When I tried to open a new ISA to transfer my old one into, I was forced to put £1 into it. This £1 forms part of my ISA Subscription, so this meant that:

    a) I couldn't do this in advance of April 6th (as my 2010/11 Subscription was full)
    b) I can't open two ISA's in the same tax year, as with this method both would be "subscribed" to, which I believe is against the rules.

    So the most profitable way for me to save used to be two ISA's, one at ~3.5% for new subscriptions, and one at ~3.0% for transfers, but this seems to no longer be the case.

    Now I'm forced to choose between leaving my old ISA at it's 0.5% rate and opening a new one at 3.5% (but no transfers) or opening a new one at ~3.0% and being able to transfer into it.

    I tried this with Santander and Halifax, both had this new £1 requirement.

    Have I gone mad this year? or have the banks just got a little bit cleverer?

    Cheers,

    Val.

    This is exactly the question I came to ask. I have just just opened the Halifax ISA but not yet funded the account nor filled in the ISA transfer form. I don't really understand ISAs but it suddenly occurred to me that perhaps doing what you have outlined above, might be possible. So I came here to ask the question.
    Any advise very very gratefully received! :) TIA
  • LokoloLokolo Forumite
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    Leothecat wrote: »
    This is exactly the question I came to ask. I have just just opened the Halifax ISA but not yet funded the account nor filled in the ISA transfer form. I don't really understand ISAs but it suddenly occurred to me that perhaps doing what you have outlined above, might be possible. So I came here to ask the question.
    Any advise very very gratefully received! :) TIA

    Whats your question exactly?
  • spikyonespikyone Forumite
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    Valor wrote: »
    This used to be true, but it seems that this year the banks have a new trick.

    When I tried to open a new ISA to transfer my old one into, I was forced to put £1 into it.
    Valor wrote: »
    I tried this with Santander and Halifax, both had this new £1 requirement.

    I have both of these and didn't have to deposit anything immediately.

    Although Halifax say you have to credit £1, a transfer-in counts towards this. And their requirement is that you deposit within 28 days for either transfers or deposits - see the summary box tab here. So it would've been fine to open the account in the 2010/11 tax year for the current year's allowance or to transfer.

    Santander seem to have no consistency (maybe as a result of being B&B, A&L, Abbey, etc, maybe just because their service is apparently poor), but I went into my local branch on April 1st - yes, I know - and managed to open an account without depositing. They don't accept transfers on any account with a decent rate anyway.

    Since both these accounts are still available you haven't missed out, but it's still worth knowing for next ISA season I guess.
  • LeothecatLeothecat Forumite
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    Lokolo wrote: »
    Whats your question exactly?

    Sorry that was very unclear.....:o
    Ok I have this morning opened a Halifax ISA and was going to transfer from 2 previous years' Abbey accounts into this new one @3%. I was also going to fund this new account with this years Isa allowance.

    It then occurred to me that perhaps I could open a new Santander Isa @ 3.5% and not contribute any new money into the Halifax Isa. Instead I would put my full years Isa allowance into the Santander Isa.

    My question is:
    Can I open 2 Isa in 1 year, transfer old money into 1 of them and fund the other with new Isa allowance?

    Thanks!
  • LokoloLokolo Forumite
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    Leothecat wrote: »
    Sorry that was very unclear.....:o
    Ok I have this morning opened a Halifax ISA and was going to transfer from 2 previous years' Abbey accounts into this new one @3%. I was also going to fund this new account with this years Isa allowance.

    It then occurred to me that perhaps I could open a new Santander Isa @ 3.5% and not contribute any new money into the Halifax Isa. Instead I would put my full years Isa allowance into the Santander Isa.

    My question is:
    Can I open 2 Isa in 1 year, transfer old money into 1 of them and fund the other with new Isa allowance?

    Thanks!

    Yep yep yep.

    The Halifax one you opened this morning - you haven't put any money into this? (i.e. its £0 balance)

    If if it £0. You need to follow the rest of these instructions:

    http://www.halifax.co.uk/savings/accounts/cash-isas/transfer-your-isa/

    You've obviously done Step 1, so just onto Step 2 :)
  • LeothecatLeothecat Forumite
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    Thanks Lokolo! I was hoping you would say that :)
This discussion has been closed.

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