ISA confusion

[IanA2]

At least my confusion, and posting in the hope someone knows as my bank seemed a bit vague.

Currently have a fixed rate one year cash isa opened in tax year 22/23 ie 1st March 2023. On maturity the bank moves this to this an easy access variable rate isa until told otherwise.

We are currently in tax year 23/24 so I was wondering if I could:

1. Open a new cash isa for this tax year 23/24

and then,

2, Top up the 22/23 isa in the 24/25 tax year.

Many thanks

[mike13]

If I'm reading this correctly, I don't think that's allowed.

[Greshamst]

The fixed isa should just mature into a variable isa, which wouldn’t count as opening a new ISA in the 23/24 year.

I think you can do what you’re suggesting as

Tax year 22/23 - opened and funded fixed ISA
Tax year 23/24 - no ISA currently opened or funded. So you can open and fund £20k before 5th April
Tax year 24/25 - can fund either existing ISA with a further 20k

[The Leaper]

IanA2 said:

At least my confusion, and posting in the hope someone knows as my bank seemed a bit vague.

Currently have a fixed rate one year cash isa opened in tax year 22/23 ie 1st March 2023. On maturity the bank moves this to this an easy access variable rate isa until told otherwise.

We are currently in tax year 23/24 so I was wondering if I could:

1. Open a new cash isa for this tax year 23/24

and then,

2, Top up the 22/23 isa in the 24/25 tax year.

Many thanks

You cannot open another cash ISA assuming you have paid in the max of £20,000.

On maturity at 1 March 2024 you'll have the option to move the maturity value into another ISA with the same provider, or into an easy saver with them at a crap rate. Wife and I have several ISAs and we aways do the former, unless we need the cash for any purpose at the maturity date in which case we simply take the cash we need and transfer the balance into an ISA with the same provider.

R.

[trickywoo]

IanA2 said:

At least my confusion, and posting in the hope someone knows as my bank seemed a bit vague.

Currently have a fixed rate one year cash isa opened in tax year 22/23 ie 1st March 2023. On maturity the bank moves this to this an easy access variable rate isa until told otherwise.

We are currently in tax year 23/24 so I was wondering if I could:

1. Open a new cash isa for this tax year 23/24

and then,

2, Top up the 22/23 isa in the 24/25 tax year.

Many thanks

I don't see why not as they will all be in different tax years. To simplify you could transfer the 22/23 ISA to the 23/24 ISA and then top that one up for 24/25. Assuming all providers allow transfers in / out.

[trickywoo]

The Leaper said:

You cannot open another cash ISA assuming you have paid in the max of £20,000.

That is true but in OP's case all the tax years are separated, or will be, from what he has said.

[ro250]

This has confused me as have a similar situation coming up. Cash ISA matures mid-April and the offer from bank is to move this to a rubbish instant access ISA. My plan therefore is to transfer this to a new ISA in April (maybe with same bank, maybe not).

I was pretty sure that has nothing to so with my 2024 allowance as it's an ISA transfer, so was still planning on opening another ISA in the next financial year and contributing to it.

[Greshamst]

ro250 said:

This has confused me as have a similar situation coming up. Cash ISA matures mid-April and the offer from bank is to move this to a rubbish instant access ISA. My plan therefore is to transfer this to a new ISA in April (maybe with same bank, maybe not).

I was pretty sure that has nothing to so with my 2024 allowance as it's an ISA transfer, so was still planning on opening another ISA in the next financial year and contributing to it.

That should be fine.

In fact there are new rules coming in April that you WILL be able to fund more than one Cash ISA in the same tax year anyway.

[mike13]

ro250 said:

This has confused me as have a similar situation coming up. Cash ISA matures mid-April and the offer from bank is to move this to a rubbish instant access ISA. My plan therefore is to transfer this to a new ISA in April (maybe with same bank, maybe not).

I was pretty sure that has nothing to so with my 2024 allowance as it's an ISA transfer, so was still planning on opening another ISA in the next financial year and contributing to it.

That is allowed, I'm looking at doing this myself, not sure if I'm understanding the op's situation correctly.

[IanA2]

mike13 said:

...not sure if I'm understanding the op's situation correctly.

This is what Trickywoo above said.

"I don't see why not as they will all be in different tax years. To simplify you could transfer the 22/23 ISA to the 23/24 ISA and then top that one up for 24/25. Assuming all providers allow transfers in / out."

He crystallises my thinking. It would be good to get a definitive ruling.

[mike13]

IanA2 said:

This is what Trickywoo above said.

"I don't see why not as they will all be in different tax years. To simplify you could transfer the 22/23 ISA to the 23/24 ISA and then top that one up for 24/25. Assuming all providers allow transfers in / out."

He crystallises my thinking. It would be good to get a definitive ruling.

I still can't really get my head around this, Trickywoo can see this better than me I think, hopefully you're both correct and you can get it done.

[xeny]

mike13 said:

I still can't really get my head around this, Trickywoo can see this better than me I think, hopefully you're both correct and you can get it done.

As long as no more than £20K is transferred into an ISA wrapper in any tax year, and that money only goes into one ISA (of each type, so cash and S&S is OK for example), I think you're fine. I can't see where the OP breaches this principle.

[IanA2]

Thanks, all Isa’s cash. Does that change anything?

[Greshamst]

IanA2 said:

Thanks, all Isa’s cash. Does that change anything?

No

Not sure if I wasn’t clear enough in my earlier post, but as you’ve described it, you’re within the rules and fine.