ISA (Help to buy) - how it affects allowance

[AleisterCrowley]

I've got a Halifax HTB ISA running at the moment, which is drip-fed with £200 pm (the maximum)
So that is £2400 pa off my allowance for 16-17
I have currently got a big(ish) cash float in my Shares ISA and dont want to add the remainder of my allowance to it.
Can I pay the balance of my allowance (About £13k) into another Cash ISA? I'm assuming that I can given the £2400 limit on the HTB ISA
How about opening a new Cash ISA this year , as my NSANDI one has dropped the interest rate?

Moderator Message:
Moved from DAK - Chris

[PinkDalek]

I've got a Halifax HTB ISA running at the moment, which is drip-fed with £200 pm (the maximum)
So that is £2400 pa off my allowance for 16-17
I have currently got a big(ish) cash float in my Shares ISA and dont want to add the remainder of my allowance to it.
Can I pay the balance of my allowance (About £13k) into another Cash ISA? I'm assuming that I can given the £2400 limit on the HTB ISA
How about opening a new Cash ISA this year , as my NSANDI one has dropped the interest rate?

Others might provide chapter and verse but it is not really the opening itself that is a problem. It is not being allowed to subscribe to more than one cash ISA in the same tax year that is. Apparently a help to buy ISA is deemed to be a cash ISA.

The workaround is described in the link below at 8:

http://www.moneysavingexpert.com/saving ... to-buy-ISA

(Btw here viewforum.php?f=11 would be a better place for the Topic.)

[swill453]

Can I pay the balance of my allowance (About £13k) into another Cash ISA? I'm assuming that I can given the £2400 limit on the HTB ISA
How about opening a new Cash ISA this year , as my NSANDI one has dropped the interest rate?

I don't think you can, the rules around HTB ISAs are a little strange.

It looks like you can only do that if your provider has a "portfolio ISA".

You can still only subscribe to one cash ISA but it can be made up of one or more cash ISA products, including a Help to Buy: ISA,

https://www.helptobuy.gov.uk/help-to-buy-isa/faq/

Scott.

[AleisterCrowley]

Thanks both , bit surprised if I have interpreted correctly as it means anyone with a HTB ISA is forced to use the rest of their allowance in a shares ISA
But, didn't they relax the transfer rules and allow transfers from a shares ISA back into a cash ISA ? Just a vague (possibly wrong) memory - I have only used the allowance for shares for years, other than recent HTB, so out of touch with the details

[swill453]

But, didn't they relax the transfer rules and allow transfers from a shares ISA back into a cash ISA ? Just a vague (possibly wrong) memory - I have only used the allowance for shares for years, other than recent HTB, so out of touch with the details

Yes they did. So you could probably put the remainder of this year's subscription into a shares ISA, and then transfer into a cash ISA.

(You can probably only transfer previous year's subscriptions, but you say you have a cash float there. And how could they distinguish different bits of cash anyway?)

Scott.

[AleisterCrowley]

Thanks, I will stick my head in ISA regs when I get a chance

[k333]

Thanks, I will stick my head in ISA regs when I get a chance

I think it is worth mentioning that the Cash ISA at the moment doesn't give any advantage over the non-ISA for a standard rate taxpayer, which many of us are. All interest is paid gross and incurs no tax.

- K

[PinkDalek]

Thanks, I will stick my head in ISA regs when I get a chance

I think it is worth mentioning that the Cash ISA at the moment doesn't give any advantage over the non-ISA for a standard rate taxpayer, which many of us are. All interest is paid gross and incurs no tax.

- K

That is not wholly accurate as basic rate taxpayers can be liable to Income Tax on their unsheltered interest and, in any event, one can only assume the OP hopes to get the HTB ISA bonus in due course. Which wouldn't be available in a standard (taxable) deposit account.

[AleisterCrowley]

All interest is paid gross and incurs no tax.
Only up to a point - £1000 for basic rate taxpayers, £500 for higher rate
It gets more complicated around £11k -£17k as there is a £5k thingy whatnot allowance
This sort of explains it;
http://www.moneysavingexpert.com/saving ... ee-savings

Personally I like to use up my limit each year as insurance against future changes. Yep, I know they could raid ISAs , but it would be very unpopular

[k333]

All interest is paid gross and incurs no tax.
Only up to a point - £1000 for basic rate taxpayers, £500 for higher rate
It gets more complicated around £11k -£17k as there is a £5k thingy whatnot allowance
This sort of explains it;
http://www.moneysavingexpert.com/saving ... ee-savings

Personally I like to use up my limit each year as insurance against future changes. Yep, I know they could raid ISAs , but it would be very unpopular

Yes that is fundamentally the way I see it too, but right now if it is a case of 1.50% non-iSA against 1.20% ISA (actual case), the non-ISA wins. And yes PD, there are limits involved here, but ones which do not apply in practice. Anyone with that sort of money has a significant part in an ISA, before the current rules came in relatively recently.

- K

[swill453]

Yes that is fundamentally the way I see it too, but right now if it is a case of 1.50% non-iSA against 1.20% ISA (actual case), the non-ISA wins.

Yes, it's very irritating. Do you withdraw £100K from an ISA, carefully built up over the years, to chase the interest rate? If it flips again, doing the reverse isn't easy.

Scott.

[k333]

Yes that is fundamentally the way I see it too, but right now if it is a case of 1.50% non-iSA against 1.20% ISA (actual case), the non-ISA wins.

Yes, it's very irritating. Do you withdraw £100K from an ISA, carefully built up over the years, to chase the interest rate? If it flips again, doing the reverse isn't easy.

Scott.

Yes indeed. I wouldn't want to give up the majority of my ISA-backed cash either, and for the reasons indicated.

- K

[XFool]

I think it is worth mentioning that the Cash ISA at the moment doesn't give any advantage over the non-ISA for a standard rate taxpayer, which many of us are. All interest is paid gross and incurs no tax.

That may be true in most cases but is an oversimplification. "All interest" is paid gross, but only up to £1000 pa of that interest (the PSA for a BR Tax Payer) is Tax Free outside an ISA.