Cash Usually offered by banks and building societies. As the name suggests these are simply savings accounts, but held within the tax free ISA wrapper. Hence all interest earned on your subscriptions are tax free.
Who can open a Cash ISA ?
Cash ISAs can be opened by any UK resident over the age of 18.
If the investor ceases to be a UK resident, they should inform their ISA provider at the earliest opportunity. Their ISA account will remain open, but they will not be allowed to make new subscriptions.
Yearly allowance
£ 20,000.00 in total can be subscribed to a Cash ISA, or combination of ISA products during any one tax year.
There is no minimum subscription stipulated in HMRC ISA regulations, but most ISA providers will determine their own minimum, usually around £ 200.00.
The tax year runs April 6th to April 5th of the following year. Once the tax year has ended, unused ISA allowance is lost.
Application form
Before the investor can subscribe to his cash ISA they will need to sign an ISA application form. This application form is “rolling”, which means the investor will not need to sign a new application form, if they have made any subscriptions during the previous tax.
If there is a break in subscriptions for one tax year then the investor will need to sign a new application form.
EXAMPLE
Investor signs an application form in tax year 16/17 and subscribes during this tax year, but does not subscribe during 17/18, hence to subscribe in 18/19 they will need to sign a new application form. If they had subscribed in 17/18, then no application form would be required for 18/19,
Transferring your ISA account to another ISA provider
Cash ISA’s can be transferred to a new ISA provider at any point during the tax year. They can be transferred to another cash ISA, or to a Stocks and Shares ISA, current year subscriptions with the old provider would now be reflected by the new ISA provider. You can transfer up to £ 4,000.00 in a cash ISA to a LISA account, but I will discuss this separately in a post covering LISA accounts.
To transfer an existing ISA account, the investor should request the new provider to “transfer in” the old account. An ISA transfer form will need to be signed by the investor, and the new provider will contract the old one on your behalf.
If the investor stops making subscriptions, the ISA account does not close, unless the investor requests the account to be closed.