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Can you have more than one stocks and shares ISA?

You can hold money in more than one stocks and shares ISA – but you can't pay into more than one per tax year. Here are the rules.

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Ceri Stanaway

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Stocks and shares ISAs are a great tool to help you maximise investment returns – but they come with strings attached. We explain one of the key restrictions: the limits on how many you can open per tax year.

What is a stocks and shares ISA?

A stocks and shares ISA lets you invest within the tax-free wrapper of an ISA. You can use a stocks and shares ISA to buy different types of investment, including funds, bonds and (as the name suggests) stocks and shares.

Just as the interest you make on cash ISA savings is always tax free, you don’t pay tax on any returns you make on investments in a stocks and shares ISA. So you’ll never pay income tax on any government or corporate bonds, capital gains tax on any profit you make from the sale of shares or funds or dividend tax on any dividends you receive from shares.

You can read more about the pros and cons in our full guide to stocks and shares ISAs.

What are the rules for stocks and shares ISAs?

The rules on stocks and shares ISAs don’t only apply to this type of ISA. They apply across all ISAs you own. The following are the key things you need to know:

  1. There is a limit on how much, in total, you can contribute to ISAs each year. This is known as the ISA allowance. For the 2022–23 tax year, the allowance is £20,000. The limit applies to how much you can pay in – there’s no limit on how much interest or investment returns you can make. However, if the value of your annual investments falls below the £20,000 you’ve paid in, you can’t top this up.
  2. You can divide your ISA allowance as you wish across the 4 different types of ISA: cash, stocks and shares, innovative finance and lifetime ISAs. You can only pay up to £4,000 into a lifetime ISA.
  3. You can only make new contributions into one of each type of ISA per tax year. So if, for example, you paid £10,000 into one stocks and shares ISA early on in the tax year, you couldn’t pay the remaining £10,000 of your allowance into a different stocks and shares ISA later in the year. You’d have to pay it into the same stocks and shares ISA, or into a different type of ISA. That “new money” point is important though. More on this later.

Can I open more than one stocks and shares ISA per year?

Just to be clear, by “year” we mean “tax year”. The tax year runs from 6 April one year to 5 April the following year.

And no, you usually can’t open multiple stocks and shares ISA per tax year.

There are a couple of caveats though.

Firstly, if you inherit an ISA that someone has left you in their will, then you can open a new ISA to transfer the investments into.

Secondly, you may be able to pay into one ISA in a tax year and then decide it is no longer the best option for you. In this case, you can transfer your ISA to a new provider. The new provider will count as your “one” ISA, and you can make new contributions up to your total ISA allowance. You have to transfer the full ISA holdings though. You can’t transfer only part of an ISA you’ve already paid into in that tax year.

What happens if I pay into more than one stocks and shares ISA in a year?

It’s surprisingly easy to accidentally break the “one stocks and shares ISA per year” rule. Perhaps, for example, you’re a bit absent-minded with dates, and unthinkingly make a small top-up to an existing stocks and shares ISA on 6 April (the day after the previous tax year ends). Let’s say you then forget about ISAs for a while until a tempting ad a few months later prompts you to think about opening a new one. You duly do so and start paying in, without even thinking about the small top-up you made months ago.

As soon as you realise you’ve inadvertently broken any rules, call HMRC’s ISA helpline on 0300 200 3312 for advice on what to do. Don’t try and fix it yourself, for example by closing one or both ISAs. You may land yourself in even deeper water.

If you don’t tell HMRC proactively, it will probably find out when it checks individual records at the end of the tax year. Even at this point, chances are you’ll just be let off with a warning (provided you’re not a repeat offender), but better safe than sorry.

Can I have more than one stocks and shares ISA in total?

Yes, you can. Although you can only open (and make new contributions to) one stocks and shares ISA per tax year, there’s nothing stopping you from opening a new stocks and shares ISA each tax year. So, in theory, you could have as many stocks and shares ISAs as years you’ve made ISA contributions.

When can I open a new stocks and shares ISA?

When a new tax year begins, you’ll have a fresh £20,000 ISA allowance. Even if you’re happy with your current stocks and shares ISA, you may decide it’s time to ring the changes with a new provider.

Even if you see tempting offers from ISA providers towards the end of the current tax year, if you’ve already paid into a stocks and shares ISA that year, you’ll have to wait until 6 April to open a new one.

Can I pay into more than one stocks and shares ISA per year?

No. You can only make new contributions to one stocks and shares ISA per tax year (though, as we’ve outlined above, you may be able to transfer an ISA that you open and then change your mind about in its entirety. In this case, the provider you transfer to will effectively become the one stocks and shares ISA you’re allowed per tax year).

Even if you have different stocks and shares ISAs from previous tax years, you can’t pay into them if you’ve opened a new one for the current tax year.

You can, however, pay into multiple different types of ISA – cash, stocks and shares, innovative finance and lifetime ISAs. You can only pay into one of each per tax year.

Can I transfer stocks and shares ISAs from previous years into a new ISA?

Yes! This is one of the few aspects of ISAs for which there are no official limits or restrictions. So if, for example, you spot a provider with much lower investment fees than the ISAs you’ve opened in previous tax years, you may wish to transfer old balances to take advantage of this.

If you transfer an ISA that you have paid into during the current tax year to a new provider, you must transfer the whole balance. But if you’re transferring ISAs from previous years, you can choose whether to transfer the full amount or only part of it. There are no restrictions on how often you can make transfers – though it would probably be a hassle to do it too often. It’s also unlikely to be worth chopping and changing too regularly, especially as the pros and cons of different stocks and shares ISA providers may not be as clear cut with cash ISAs.

You can also transfer between different types of ISA, if you wish. For example, you could transfer a cash ISA into a stocks and shares ISA, or vice versa.

Regardless of what and how much you’re transferring, it’s important to do so via the official ISA transfer process. You’ll lose the tax advantages if you simply take the money out and pay it into a new provider. It will count as a new contribution rather than a transfer, and eat up your annual ISA allowance.

And bear in mind that although there are no official restrictions on transfers, ISA providers are not obliged to allow transfers in. They have to allow transfers out, though.

What’s the point of having more than one stocks and shares ISA?

Zoe Stabler

Finder expert Zoe Stabler answers

It’s a good question. Having multiple financial accounts of any type gives you more to keep track of, so is arguably more effort. If you’re happy with an existing stocks and shares ISA, you might question the point of opening a different one.

That said, offers do change over time and new providers enter the market. Even if you picked the best possible ISA at the time, a provider may launch a new option with lower fees, a slicker service or a wider range of investments that interest you, for example. This could be enough to tempt you to try out its offering by opening a new account, without necessarily wanting to take the plunge of transferring your existing ISA. For the time being, at least.

Even if, in this example, you might eventually want to consolidate all your stocks and shares ISAs into the one that works best for you, for some there may still be good reasons to hold money in separate ISAs. Once you’ve paid the money in, there are no restrictions on what you can do with it within the confines of the ISA – buying and selling investments as often as you wish, in accordance with your investment strategy. Different ISAs will have different investments available, so having 2 or more ISAs may enable you to diversify your portfolio more than you’d be able to with just one.

Having 1 or more separate stocks and shares ISAs is a personal choice. Just make sure that it’s a conscious choice, made for the right reasons, rather than just not getting around to transferring accounts you’re no longer happy with.

Bottom line

If you want to maximise the returns on your investments, the tax-free returns offered by a stocks and shares ISA can make it a great way to do so. But it’s important to avoid falling foul of the rules and restrictions, or you risk losing some of your tax-free benefits and potentially incurring the wrath of HMRC. The tips in this guide will help you stay on the tax man’s good side.

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