Exceded ISA Allowance

[HumbleJim]

Hi

Sorting some savings for an elderly relative I find they have gone over the ISA allowance for 2013-2014.

£11,500 into a stocks and shares ISA
£3500 into an exisiting cash isa with a different provider.

Should we just keep quiet or should I speak to the inland revenue?

[BoRED S2upid]

Interesting I always wondered if anyone ever did checks do providers share data? Do they report who has used their allowance to stop you opening several and maxing them all. Does anyone care?

[megaphone]

ISA providers have the NI numbers, will the multiple applications show up at HMRC though? I have never risked it although I've heard of investors who do break the rules getting letters from HMRC warning them.

Unless the investors have lots to hide and don't want to alert HMRC, then I'd just wait to see what happens.

[mike13]

I've done the same,read up about it,seems most people get a warning letter at first.Easy mistake to make

[Ginge R]

You can't take advantage of an allowance that you aren't entitled to in the first place, this sometimes happens with pension contributions too. Depending on who is managing the ISA, it can be unwrapped to its previous status. Just tell the provider, mistakes happen.

[HumbleJim]

Ginge R said:

You can't take advantage of an allowance that you aren't entitled to in the first place, this sometimes happens with pension contributions too. Depending on who is managing the ISA, it can be unwrapped to its previous status. Just tell the provider, mistakes happen.

Thanks, if we do nothing what will the inland revenue do? Send a tax demand?

[ninja-lewis]

See 17.28 onwards

http://www.hmrc.gov.uk/isa/isa-guidance-notes.pdf

[HumbleJim]

ninja-lewis said:

See 17.28 onwards

http://www.hmrc.gov.uk/isa/isa-guidance-notes.pdf

Blimey

[HumbleJim]

Just found this on the HMRC website. All is well with the world again.



Q. What if I pay too much money into my ISAs?

A. If, by mistake, you put too much money into your ISAs (more than £11,280 in the tax year 2012-13, of which up to £5,640 can be put into one cash ISA), the excess payments are invalid, and you are not entitled to any tax relief on investments purchased with the excess payments.

You should not try to correct this mistake yourself. Where appropriate, HMRC will contact you after the end of the year and tell you what action is necessary.