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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I did not realise that you can only take out one stocks and

Resolved Question:

I did not realise that you can only take out one stocks and share ISA in one tax year. I thought that it was possible to take out two ISAs as long as the total amount invested was within the total treshold allowance. What shall I do? Should I sell the second ISA or just tell HMRC or what? I want to sort it out.
What will HMRC do, i.e. are there any penalties for my mistake?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

When did you take out two stocks and shares ISAs.
Customer: replied 2 years ago.

In this finacial year. One was a regular monthly direct debit and the other a few weeks ago.a

Expert:  TonyTax replied 2 years ago.
Thanks.

You can have one cash ISA and one stocks and shares ISA in any one tax year with the overall investment split between the two or not as you can read here.

If I were you, I'd tell the provider of each of the ISAs what you have done and ask them what they do in such situations. You will probably need to have one closed down but HMRC seems to take a lenient view on such things as you will read here so I would not necessarily contact them unless you need to declare capital gains. I certainly wouldn't lose any sleep over it as you are not the first to make a mistake such as this.

I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.

Well as i said i tried to speak to hmrc about this. They told me they could not answer by telephone but directed me to the hmrc website on the FAQ section www.hmrc.gov.uk where they said it said not to try and corect the mistakeyourself but they would pick it up. I have not been able to find this on the website! I am sorry but the answer you gave does not quite concur with what they said. It was on tel. 0300(###) ###-#### ***** took 45mins t answer the phone. Sue

Expert:  TonyTax replied 2 years ago.
It may take HMRC some time to pick it up by which time you may have earned tax free income and capital gains so it may be more expensive tax wise to unravel at a later date. These things are usually picked up by HMRC compliance inspections and, given the lack of resources in HMRC, it could take years.

You can contact the ISA manager within 30 days of taking it out to have the plan cancelled but I suspect you are beyond that period. If you wait for HMRC to contact you, make sure you have the funds in plce to pay tax liabilities if there are any.
Customer: replied 2 years ago.

Thank you. Would there be any problems with advising hmrc? I need to be careful that I am doing the correct thing under the circumstances and dont want to commit an offence.On the link you sent(THIS IS MONEY) it gave the helpline but this tel.no is nolonger valid and there is a recorded message giving the tel no I tried which took 45mins to answer. Thank you Sue

Expert:  TonyTax replied 2 years ago.

The government ISA regulations for managers are here.

The relevant sections are paragraphs 5.5,5.6, 12.23, 12.24, 17.24, 17.28 and 17.38. Whilst they tell ISA managers to tell investors to wait to be contacted by HMRC, I know people do contact the managers.

If you are content to wait until you are contacted by HMRC which is what they said to you that they would do, then that's fine. My point was simply that it may be a while before that happens. I see no problem with writing a letter to HMRC informing them of your situation. You certainly won't get into any trouble.

Customer: replied 2 years ago.

Thank you, ***** ***** I contacted hmrc, would they make me cancel/sell the second stocks and shares ISA. I understand from your previous answer that they would not.

Even though it may be within the 30 day cancellation period you mentioned.

Many thanks for your responses and assistance.

sue

Expert:  TonyTax replied 2 years ago.
According to the article here, you should sit tight and wait for contact from HMRC. The article gives a brief idea of how the matter will be rectfied. Given the apparent complexity and the fact that if you try to do it yourself, HMRC may tell you to change what you have done and do it another way, then the best advice would be to sit tight and wait.
Expert:  TonyTax replied 2 years ago.
The article is here.
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