Can i transfer an old ISA and open/fund a separate new ISA in the same tax year

I have two ISA's currently. 1. A fixed Cash ISA that matures in the next few days which was opened on 24th October 2022. No funds have been paid into this ISA since December 2022. 2. A Cash ISA opened on 5th April 2023 and I have paid funds into it this tax year and will continue to do so. Can I transfer the maturing fixed Cash ISA into a new ISA with no intention of paying funds into it? Or can I only transfer the maturing ISA to the current ISA i am funding?

Hi Alanok,
Please refer to:
Individual Savings Accounts (ISAs)
Thank you. 

 

Hi HMRC Admin 25 Thank you for replying and sending me the details of ISA page but I'm afraid it doesn't answer my question. In short I want to open two cash ISA's in the same tax year. A flexible ISA to use to pay/withdraw fund. A fixed ISA to transfer my matured ISA but will not be paid in to. I have researched this topic and I get conflicting views. Some say I can't open two cash ISA's in the same tax year, but then some say opening and transferring are not the same so if I am transferring an ISA and don't plan on funding it with new money it doesn't count as opening a new ISA. Thanks for your time and look forward to your reply.

Hi Alan Kwok,
You cannot open 2 cash ISA in the same tax year.
You can open 1 and transfer the funds from another into the new one as long as you havent paid any funds into the existing one.
Thank you.

Hi Alan, I'm no expert, but from experience and reading your enquiry, I believe - yes, you can open 2 ISAs (or more) in a single year. The point is that you can only make (new) contributions to one account in the current tax year. Therefore, (1) you can 'open an account' by moving your maturing fixed rate ISA into a new fixed rate ISA (perhaps with a different provider), without making new contributions to it. This assumes that the contributions you originally made to it were from previous tax years. [ I've just moved a maturing fixed rate ISA myself - opened in 2022-23 with 2021-22 (previous year) contributions - maturing in 2023-24 and now moved to a new provider. All the while, I've been able to contribute to a separate easy access Cash ISA. ] And (2), separately, you can continue to make 'current year' contributions to your existing Cash ISA. In this way, over time you can end up with quite a few fixed rate (no new contribution) ISAs, which you either move to a new product at the end of their terms or find a means of combining. In summary, as I understand it, the rule is that you can only contribute to one Cash ISA in any tax year. Otherwise, ISA funds that comprise previous years' contributions can be moved around to other ISA products at will - provided again that you don't contribute to those new accounts while actively contributing to another (such as your Cash ISA) during the same tax year. If I'm wrong at all on this, then I'll need to do some serious un-picking of my finances, and question a lot of the online advice I've read. Mark

Hi Mark, Many thanks for your reply and confirming what I suspected was allowed. Unfortunately HMRC do not know their own rules. And unfortunately I have already moved my matured ISA to the current active ISA I'm paying into at a much less interest rate than a fixed ISA I COULD have transferred it to. Very frustrating! Again thanks for your reply and I will follow your advice in future. Alan

The following answer from HMRC Admin 20 above is totally at odds with what I’ve read online: ‘ You cannot open 2 cash ISA in the same tax year. You can open 1 and transfer the funds from another into the new one as long as you havent paid any funds into the existing one.’ My understanding is that transferring a previous tax year’s ISA from one provider to another does not constitute opening a new ISA - nor does it affect your ISA allowance for the current tax year. Why is the Inland Revenue providing what appears to be incorrect advice on this matter.

Hi RichardCambridge,

You cannot open 2 ISAs of the same type in a tax year. There are 4 different types of ISA. You can open no more than one of each in the same tax year.

Thank you.
"

The HMRC web site is not very clear on this but the replies by HMRC seem to be at odds with the spirit of the rules at the very least. Most references to ISAs state that you cannot SUBSCRIBE, i.e. pay new money in, to more than one ISA in each financial year. The HMRC website also states "You can transfer your Individual Savings Account (ISA) from one provider to another at any time. You can transfer your savings to a different type of ISA or to the same type of ISA. If you want to transfer money you’ve invested in an ISA during the current year, you must transfer all of it. For money you invested in previous years, you can choose to transfer all or part of your savings." https://www.gov.uk/individual-savings-accounts/transferring-your-isa This seems to indicate that you can transfer complete ISA accounts so long as they are untouched this year AND open and pay new cash into a different ISA. Various financial web pages seem to support this view. We also have the situation where the money is only protected up to £85K so you need to have multiple accounts to keep your money safe. On another section in the link above it states "Your ISAs will not close when the tax year finishes. You’ll keep your savings on a tax-free basis for as long as you keep the money in your ISA accounts." Note the plural accountS So my understanding of the HMRC web site information is: 1) You can pay NEW MONEY into ONLY ONE ISA account. 2) You can transfer existing complete ISA accounts (possibly part of the money in an old account?) to new banks.

I have invested in Fixed term cash ISA 2024-2025 full allowance of 20K My Fixed term cash ISA 2023-2024 with 21K with an interest matured last week and I instructed to reinvest the full balance in to ISA 2024-2025 which already has 20K (this was told to my provider after consulting their ISA expert advisor) Now they say I can not invest in any ISA and if i wish they can out the matured amount to instant cash ISA which has interest 3% lower then Fixed term Bond

Hi Dinesh,
As you have already invested the maximum of £20k in another ISA, you now cannot deposit anything further in this tax year. You can transfer funds as this would not be seen as new funds as long as it is the provider that does it.
Individual Savings Accounts (ISAs)
Thank you.