My financial files are a bit of a shambles. Pending much overdue
housekeeping and phoning around, I'm not sure whether I've already used
my ISA allowance for the current (2016-17) tax year.
Presumably HM Revenue & Customs have a database to police the rules
although I suspect it's unlikely to be impressively up to date.
If such a database exists, can the public access it, directly or
I'm also curious. If some enthusiastic investor opens successive cash or
share ISAs, deliberately or mindlessly ignoring the rules, what actually
happens in practice?
I asked a very similar question here a few months ago (at least I
think it was here).
The answer is that, if you put too much into ISAs, you'll get a polite
little note saying "you can't do that" and returning the money.
Apparently there *is* a database of some sort somewhere in HMRC that
records this and produces the polite rejection.
Why 'we' can't interrogate it before trying to put money into an ISA
is anybody's guess. :-)
I mistakenly put two lots of Stocks & Shares ISA's into the one year,
one right at the beginning and one right at the end but with different
providers. I got a polite letter from HRMC asking me to remove one of
them which I did and sent them a copy of the sale.
Had I tried to buy the second one with the same provider they would
have course have told me. The OP should readily be able to check with
his ISA provider(s) how much he has subscribed. I use 3 providers and
each one tells me how much I have left to subscribe with their own
If there is any uncertainly then simply invest in this year's ISA, if
subsequently not permitted transfer it to next year's ISA. No big
AIUI banks make a return to HMRC:
'NI number X has paid in Y pounds to an ISA of type Z'
At the end of the tax year HMRC tallies up all the returns and then spots
anyone who has broken the rules.
I don't think this is a live process - in other words they won't know what's
happened until the end of the year, at which point they'll presumably send
you a letter to complain.
I don't think you can ask mid-year to find out - because, even if returns
are sent mid-year, you can't be sure how well your bank has been keeping
HMRC up to date.
The thing to do is ask any bank(s) you have accounts with what you have
deposited so far this year - they will know.
HMRC will tell the provider to close the ISA and return the cash *AND*
inform you what it is about to do.
That's what happened to me. NatWest had somehow or other let HMRC know
that I had opened a new cash ISAs in the current year. I hadn't. I had
*transfered* a previous year's ISA to NatWest (using NatWest's
transfer in procedure), and I had earlier *opened* a current year's
cash ISA with another provider.
It was up to me to communicate, prove and convince HMRC that I had
done nothing wrong and that the problem was with NatWest, who did
absolutely nothing to help to resolve the problem, (in fact I became
convinced that the senior staff member of the branch, at which I was
forced (by NatWest) to conduct all my attempts get NatWest to fix the
problem, didn't understand the problem).
When it was resolved I transferred the ISA out and won't go near
NatWest ever again.
I have no idea what would happen if the ISAs were non cash.
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