I am aware of the basic rules around shares and stocks ISAs and was wondering if what I am thinking (below) is valid…
Lemme ask this with an example- in financial year 2021-22 I put in 20K GBP in Freetrade ISA and in 2022-23 I opened ISA with another platform and put in 20K there. But, I did not transfer my portfolio from Freetrade to the new platform, essentially keeping both accounts alive (is this allowed in the first place?? it makes complete sense to me and there is nothing wrong about it IMO) — in this scenario can I continue to buy and sell stocks in free trade platform in FY 2022-23 to make some profit
If this above scenario is doable - may I get further clarification - can I keep switching between these two ISA accounts every second year (keeping stocks in both accounts)
The ultimate idea is to have two ISA accounts (money going into only one of them each year) - to do some positional trading in one and the other for long term holding
I know some of you are going to suggest having a GIA and ISA to do this (with the idea that capital gains up to 12K are not taxed each year) but I still would like to clarify my doubt
Yes you can continue to trade within the Freetrade account in 22-23. You just can’t put any new money into the account via 22-23 ISA subscription. You can however transfer in money from a different ISA if it has been added to that ISA in previous tax years.
Note, the answer would be the same even if you only add (subscribe) £1 to the other S&S ISA platform in 22-23.
See below. This means that if you have subscribed to a S&S ISA in current tax year and then move a current year cash subscription to a different S&S ISA, you will be in breach of the one ISA of each type per year rule.
thank you @o99 and @RumNCoke
You have clarified my query to the last detail
@o99 I will be careful not to breach the ‘one ISA of each typer per year’ rule @RumNCoke if folks at HMRC said it won’t be an issue I guess its alright then (even though its contradictory)
Basically I explained everything. Opened the conversation with I may have made a breach in the ISA rules. Apologised and said it was an honest mistake and I thought I knew the ISA rules better then I actually do, will this be a problem and if so what will likely happen?
Explained that my cash ISA (previous provider redacted) was subscribed for 2-3 tax years prior to this one and was also subscribed in this tax year but only in its previous incarnation as a cash ISA. Also explained I opened my other S&S ISA this tax year, thus this is where the potential issue is generated.
I also mentioned that I don’t intend to subscribe to the new S&S ISA until April 06, just for clarity.
The man on the phone said in his eyes it’s unlikely to generate problems so long as I don’t cross the 20k threshold between them. If so I’d be liable to pay the remainder in tax.
Confirmed this wasn’t my intentions. He said don’t worry it should be ok.
He did mention all ISA providers report once the tax year ends and if anything were to happen it would typically happen after the tax year end.
For my records I took the man’s name and advisor number (redacted for his privacy) so if anything were to come of it at tax year ended,a time when all providers report data back to HMRC, I could at least query it, should something come of it at a later stage.
Honesty is the best policy and while I’m still unsure if I’ve made a mistake and have in effect been pardoned or it’s not being looked at as a mistake. I’m at least happy to gain clarification.
I spent a few hours reading up on it. From what I’ve read in most cases HMRC will pardon or forgive most 1st time mistakes so long as it’s a genuine mistake. An apology and ab explanation will typically suffice (which I did).
What they typically won’t forgive is deliberate actions that skirt the rules, they are also heavily unlikely to forgive the same mistake twice or multiple times.
Lucky I for me it genuinely was a 1st time genuinely made mistake as I thought I knew and understood the ISA rules perhaps more intimately than I did.
