Help to Buy ISA and a Cash ISA

(J) #1

Hello! Can anyone help?

I’d really like to take advantage of an ISA (preferably with Monzo, when they become available) for the upcoming financial year, but I already have a Help to Buy ISA.

Can I open/contribute to a ‘normal’ cash ISA after April 6, 2019, and still contribute to my Help to Buy ISA?

I read a few conflicting things online, so would love some advice.

Thank you!

(Kevyn) #2

No, you cannot open a second Cash ISA in a single tax year. A Help to Buy ISA is a Cash ISA.

You can only have one of each type of ISA i na tax year. E.g. You can have 1 Cash ISA, 1 Stocks & Shares ISA and 1 Lifetime ISA but not have 2 Cash ISA’s or 2 Stocks and Shares ISA’s etc.

(J) #3

Thank you. So can I open the Cash ISA in the next financial year (next week!) as I opened my Help to Buy a few years ago, or does the same rule apply?

(Kevyn) #4

If you stopped contributing to your Help to Buy ISA this tax year and don’t add anything next tax year, you could open a new Cash ISA next tax year. Its simply contributing during the one tax year.

Bear in mind a Cash ISA might not be necessary for your needs. You could open a normal Savings Account as savings are not taxed until you earn over £1,000 in interest per year (£500 if you earn over £43,501 and immediately if earning over £150,000).

(tom moore) #5

U could add to a stocks and shares issued and HTB ISA


What actually happens if you did contribute to the original one whilst opening a new one please?

(Kevyn) #7

I am not 100% on this bit but it will be spotted by HMRC who will contact you about having an invalid ISA account. HMRC will then start the process of “repairing” your ISA. You will lose any bonus on the account and the balance will be handed back to you, after any tax. I’m not sure what happens next. Most likely they will remove the deposits for that tax year on the wrong account, or both, but they could also close either account too.

If done by mistake, it is best to contact your bank and HMRC and declare the error straight away.

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