ISA - subscribing to two in the same tax year

[loosemarbles]

someone I know ... cough cough ... has subscribed to two new ISA's in the same tax year, with different providers ... nothing I can find online offers advice about what will happen, could happen etc.

Anyone actually know? I am thinking that it would be wise to remove the money from one and leave it empty until after the tax year ends, but if that doesn't happen, what then?

[Enut]

loosemarbles said:

someone I know ... cough cough ... has subscribed to two new ISA's in the same tax year, with different providers ... nothing I can find online offers advice about what will happen, could happen etc.

Anyone actually know? I am thinking that it would be wise to remove the money from one and leave it empty until after the tax year ends, but if that doesn't happen, what then?

It's OK to pay into two ISAs during the same tax year as long as one is a cash ISA and one is a stocks and shares ISA and you don't exceed the overall limit. However if you've paid into two of the same type, or exceeded the limit, you have a problem and should contact HMRC for their guidance, apparently they should be able to tell anyway but probably better to pre empt their call.

Technically, all investments in the Isa that were made after the limit was breached will no longer be eligible for tax exemption. They will be handed back to the investor.

In a cash Isa this process is simple, but in a stock and shares Isa it is a little trickier, as fund units or shares will have to be sold.