HTB ISA used current tax year, can I withdraw and open Cash ISA?

elliottmp2p · 19 May 2017 at 4:41AM

Hi,

I have already made a 200 GBP payment this tax year into my Halifax HTB ISA.

If I withdraw 200 GBP and discontinue payments can I then pay this year's subscription into a Cash ISA and maintain my prior years in the HTB ISA?

ie payments out are deducted from current year first and a full withdrawal of current year subscriptions would no longer constitute use of the cash ISA allowance in this account?

Thanks.

isasmurf · 19 May 2017 at 6:14AM

One would question why you'd want to do this given the poor interest rates in non HTB cash ISAs but to answer your question, you could do this under self-transfer rules.

From HMRC ISA managers guidance

However, where
 the investor subscribes to two cash ISAs, in the same tax year, and
 subscriptions to the first ISA subscribed to were valid, and
 all of the current year subscriptions to the first ISA subscribed to were withdrawn (whether or not that ISA was closed) (see paragraph 12.33) before subscriptions to the second ISA were made the subscriptions to the second ISA may be valid (see paragraph 12.32a)

12.32a The first cash ISA to be self-transferred in a tax year is valid, and need not be repaired.

The second (and any subsequent) self-transferred cash ISA is not valid and is not eligible for repair.

Edit to add: you could always just do a normal transfer of current year subscriptions to the ISA you want, assuming it accepts transfers in

HTB ISA used current tax year, can I withdraw and open Cash ISA?

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