Cash ISA

[Franco5]

Is it a common that an individual paid more than £20000 across two cash ISAs in a single tax year a few years back and never had a problem?

[bitchstewie]

I don't know about "common" but I've seen various threads on various forums over the years where people have done it by accident and I don't recall any where it didn't end up as HMRC saying "don't do it again".

Not even sure that I remember that happening formally either - always seemed to be the outcome from a call to the helpline to "confess".

All anecdotal of course

[Franco5]

bhstewie said:

I don't know about "common" but I've seen various threads on various forums over the years where people have done it by accident and I don't recall any where it didn't end up as HMRC saying "don't do it again".

Not even sure that I remember that happening formally either - always seemed to be the outcome from a call to the helpline to "confess".

All anecdotal of course

It sounds like they don’t pick up on it.

[okgo]

Franco5 said:

It sounds like they don’t pick up on it.

It wouldn't be something I'd do on purpose with any kind of regularity. The likely punishment would be far greater than the gain, especially as you're talking about 4-5% I assume

[bitchstewie]

Franco5 said:

It sounds like they don’t pick up on it.

I've always worked on the theory that HMRC know everything especially with ISAs but it just isn't practical or useful to go after someone who makes a mistake and gains a couple of hundred quid (if that).

Drop multiples of £20K in different ISAs in the same year year after year and I'd assumed it would be a different story.

[Granadier]

Basic/stupid questions but I've just opened a cash ISA and trying to understand the rules. The £20,000 limit means the max I can deposit in it in one tax year? It's not a limit on the balance you can have in the account then? It suddenly occurred to me that when the interest is added to the principal, it would put the balance over the limit.

And if I have £20,000 in it at the end of the tax year, I can keep that in there, still earning interest tax-free, but could then in theory add up to another £20,000 each year? (In theory at least, actually I don't have the income to do anything like that!)

[mikeiow]

Granadier said:

Basic/stupid questions but I've just opened a cash ISA and trying to understand the rules. The £20,000 limit means the max I can deposit in it in one tax year? It's not a limit on the balance you can have in the account then? It suddenly occurred to me that when the interest is added to the principal, it would put the balance over the limit.

And if I have £20,000 in it at the end of the tax year, I can keep that in there, still earning interest tax-free, but could then in theory add up to another £20,000 each year? (In theory at least, actually I don't have the income to do anything like that!)

Yes, it is an annual allowance.
From the horses mouth: https://www.gov.uk/individual-savings-accounts/how...

[Cats_pyjamas]

It's a 20k deposit allowance. If the balance ends up more than then great.

IE I will have deposited £4800 (£400/month) in a vanguard ISA this year. I also bought 15k worth of RR shares. The RR shares are now worth £20k alone. I will continue to deposit £400/month. As overall the total monies deposited in an ISA wrapper will be under 20k. Despite the overall ISA balance being larger than that.

[Granadier]

Ah yes, pretty much what I thought. Thanks guys.

[Dixy]

I went in to one of the leading building societies yesterday to do something with an ISA and was told categorically that the ISA rules do not allow something that they do.
The Labour manifesto included simplifying ISAs, I bet what they announce on the 30th does not.