Two ISAs in one year.

Due to some miscommunication I was unaware that I was already
contributing to a mini stocks and shares ISA for the tax year 2003/04.
Last week I opened (in my ignorance) a second mini (tracker) ISA with
a different company.
This came to light on Saturday (because my wife was in a similar
situation, but fortunately her 2nd ISA was opened with the same co. as
her "unknown" ISA - she received a letter from the provider indicating
they hadn't taken 3K as planned but about half of that ... following
up that query brought to light the unknown ISA!)
So - I now have two mini stocks and shares isas for the same
finaincial year - obviously not allowed. I contacted the second ISA
provider as soon as I knew but all they could say was that the Inland
revenue would be in contact "some time" but couldn't tell me how I
could proactively sort it out with the IR. I did ask if I could just
cancel the ISA as that wou seem to be the easiest solution (ie it
never existed) but the 3K was already invested and so all I could do
was cash it in - but it would still have existed and be contracry to
rules etc.
This second ISA was bought direct from the provider's website (M&G
FWIW) with (natch) no advice from them etc etc etc.
So is there anyway I can proactively raise this with the Inland
Revenue to get it sorted out rather than wait for them to get around
to finding out in there own sweet time. I have no issue with that
fact I can't have 2 ISAs - I just want to get the situation sorted out
now that its happened.
Reply to
Ian Diddams
The second ISA will be 'unwrapped' from its start date. Unless you don't want the investment if it's not an ISA, why don't you just leave it and let the Revenue deal with it in their own time? You can regard it as unwrapped now. No point in losing sleep over it.
Rob Graham
Reply to
Robin Graham
Last week is 2004/05. Are you sure there is a problem.
Contact the Inland Revenue and tell them.
For a basic rate tax payer, there isn't really any advantage in having an equity ISA any more. There is no tax relief on dividends, and the Capital Gains probably won't exceed your annual allowance.
Reply to
Jonathan Bryce
In message , Jonathan Bryce writes
What about fixed interest stocks though? They still benefit and whilst you may not want Fxd Int in your ISA now, at some time in the future you may wish to swith your share based funds to Fixed Interest, e.g. to take an income in retirement, in which case the tax free interest might be quite handy.
Whilst, at first glance, low levels of investment into equity ISAs may not seem to require CGT protection, over a period of years it is surprising how capital can grow and saving £3k per year for 10 years could quite easily develop into a profit in excess of the CGT threshold. Also, by investing in the ISA you dont have to keep records to do any calcs with taper etc., (and which could be quite laborious if it were regular savings) to see if youve escaped CGT.
As the ISA wrapper, in effect, comes free you may as well use it.
Reply to
john boyle
Yes, for fixed interest stocks, an ISA is worthwhile. I would use the ISA allowance for that, and leave the shares outside.
This is true, but you just need to move things around when they get towards the CGT threshold.
If it would otherwise be wasted, then yes. But cash, gilts and corporate bonds should go into the ISA in preference to shares.
Reply to
Jonathan Bryce
In message , Jonathan Bryce writes
Agreed, but dont forget that once the shares are in an ISA, they can be switched into cash, fxd int etc., within the ISA without effecting the current years contribution. If you have ISA allowances available the shares should still go in the ISA so that you can switch them later.
Reply to
john boyle
Jonathan Bryce wrote in message
Yeah - the OP wasn a copy from a aquery I made elsewhere which was in 2003/04 at the time of posting.... it elicited no replies so I thought I might ask here.
Just my local office? No worries...
Reply to
Ian Diddams

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