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  • FIRST POST
    • shover
    • By shover 8th Jan 18, 1:24 PM
    • 8Posts
    • 3Thanks
    shover
    ISAs - some questions
    • #1
    • 8th Jan 18, 1:24 PM
    ISAs - some questions 8th Jan 18 at 1:24 PM
    I understand that an ISA is a place to put some cash where it can grow (hopefully) in value without the increase being taxed.

    So far, I've opened a new ISA each year. But I can see that over the years I'm going to end up with a lot of accounts. Is this how it is supposed to work? Or can I have one ISA and put 20,000 a year into it?

    On a S&S ISA, if I get dividends, can I reinvest them in the ISA? Or do I have to take out the payment and put it somewhere else?

    I recently had to close out a couple of ISAs as I need cash in an emergency, I guess there is no way of 'reactivating' them, right?

    Thanks in advance for insights.
Page 1
    • bowlhead99
    • By bowlhead99 8th Jan 18, 1:32 PM
    • 7,988 Posts
    • 14,532 Thanks
    bowlhead99
    • #2
    • 8th Jan 18, 1:32 PM
    • #2
    • 8th Jan 18, 1:32 PM
    I understand that an ISA is a place to put some cash where it can grow (hopefully) in value without the increase being taxed.
    Originally posted by shover
    Yes

    So far, I've opened a new ISA each year. But I can see that over the years I'm going to end up with a lot of accounts. Is this how it is supposed to work?
    You can usually subscribe more money into a previously-opened account An exception would be if it was a fixed term cash ISA with a fixed interest rate which didn't allow further contributions in future years.

    And you can transfer one old account into another old account (or new account) to consolidate them

    Or can I have one ISA and put 20,000 a year into it?
    Yes you can.

    On a S&S ISA, if I get dividends, can I reinvest them in the ISA?
    Yes if you have kept the received dividends in the ISA you can just reinvest them in the investments held in that ISA.

    If you have taken them out of the ISA back to your own bank account, it would count as a new subscription if you were to put them back in, so you'd have to follow the relevant rules (can't subscribe over 20k to ISAs in any one tax year, can't subscribe to more than one ISA of the same type in the same tax year)

    I recently had to close out a couple of ISAs as I need cash in an emergency, I guess there is no way of 'reactivating' them, right?
    Not unless they were 'flexible ISAs' and you only took the money out temporarily rather than formally closing it.

    If the ISA has been closed down or zero'd out, or you haven't made any contributions to it in the current year, you usually have to go through the 'new account opening' process to open them up again. As part of doing that, you have to make sure you have not already subscribed to another different ISA of the same type in the same tax year, and that you haven't gone over the 20k per year limit (or any lower product-specific limits such as the ones for LISA or HTB ISA etc).
    • dunstonh
    • By dunstonh 8th Jan 18, 1:34 PM
    • 93,036 Posts
    • 60,430 Thanks
    dunstonh
    • #3
    • 8th Jan 18, 1:34 PM
    • #3
    • 8th Jan 18, 1:34 PM
    o far, I've opened a new ISA each year. But I can see that over the years I'm going to end up with a lot of accounts. Is this how it is supposed to work?
    If you use the same ISA provider you would have one account. if you used different providers then you would end up with different ones.

    On a S&S ISA, if I get dividends, can I reinvest them in the ISA? Or do I have to take out the payment and put it somewhere else?
    If you have the dividends withdrawn (known as natural income) then you would have to reinvest them and they would use the ISA allowance. If you do not withdraw them but leave them in the ISA then they do not use the ISA allowance as they have never left the ISA.

    I recently had to close out a couple of ISAs as I need cash in an emergency, I guess there is no way of 'reactivating' them, right?
    Some types can under certain criteria.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • shover
    • By shover 8th Jan 18, 1:37 PM
    • 8 Posts
    • 3 Thanks
    shover
    • #4
    • 8th Jan 18, 1:37 PM
    • #4
    • 8th Jan 18, 1:37 PM
    Hey, thanks. Very clear answers... appreciate it.
    • ivormonee
    • By ivormonee 8th Jan 18, 2:07 PM
    • 165 Posts
    • 102 Thanks
    ivormonee
    • #5
    • 8th Jan 18, 2:07 PM
    • #5
    • 8th Jan 18, 2:07 PM
    Both answers above are excellent and better than what I could have said so nothing to add; all points have been very thoughtfully and clearly answered.
    • jimjames
    • By jimjames 8th Jan 18, 5:55 PM
    • 12,653 Posts
    • 11,322 Thanks
    jimjames
    • #6
    • 8th Jan 18, 5:55 PM
    • #6
    • 8th Jan 18, 5:55 PM
    Only thing I'd add is if you're looking for a home for cash to use in an emergency then a cash ISA might not be the best option when far better rates are available elsewhere. S&S ISAs are an excellent way to build sums of money long term though.
    Remember the saying: if it looks too good to be true it almost certainly is.
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