Can I put cash in a previous year's Isa?

5 September 2013


I've filled up my cash Isa allowance for the past two years, but I have an Isa still open from the previous year. Am I able to use the allowance from that Isa, given the allowance wasn't actually used that year?
Paul Cross/Wirral


Unfortunately, it is not possible to ‘carry forward' unused contribution allowances from previous years [unlike pensions].

Each tax year is counted separately, so all contributions have to be made between 6 April and 5 April.That is why we get that mad scramble during March and early April every year - the so-called ‘Isa season' - to ensure allowances are used before the tax-year end.

ISA rules for 2013/14

The Isa allowance for tax year 2013/14 is £11,520, with savers able to invest the full amount in a stocks and shares Isa, but only £5,760 in a cash Isa. The allowance only applies to the money you pay into the account that tax year, not your overall balance.

A cash Isa offers you a tax-free saving, so you won't pay tax on the interest earned or capital gains tax. However, stocks and shares Isas differ slightly in that you won't pay capital gains tax on the growth of the account, but you will still pay 10% tax on any dividend income.