Credit deflation and the reflation cycle to come (part 8)

[Democorruptcy]

1 hour ago, Funn3r said:

I opened a cash ISA with HL but not put money into it yet. At the same time I noticed that whenever I wanted to login to HL they now wanted to send me a GSM text containing a code number to use in the login process.

This was awkward as there's no mobile signal where I live on any network. When I queried it they told me that as I now had a cash ISA the financial regulations now required them to impose 2factor authentication on me.

I asked them to close the ISA, which they did, and the text requirement went away.

They have to do it once you open a Cash ISA. The most annoying thing for me would be the set 5 minute timeout.

Quote

 

Two-factor authentication (or 2FA) is an extra layer of security that can be added to your online account by calling 0117 980 9984 or contacting us by secure message.

However, if you use your fingerprint or face to log into our mobile app, this automatically gives us two-factor authentication in one secure step.

You already have 2FA on your HL account if you have an Active Savings account or HL Cash ISA, or you’ve linked accounts with someone who does. These types of account must comply with the Payment Services Regulations 2017, which require 2FA.

There are two changes when you have 2FA on your HL account:

Automatic timeout: You are logged out after 5 minutes of inactivity. This could be if you navigate away from your account to browse articles or other public pages on the HL website. When you are using your account, such as clicking between your accounts and dealing, you will stay logged in.

https://www.hl.co.uk/security-centre/the-security-of-your-hargreaves-lansdown-account

 

 

[sleepwello'nights]

3 hours ago, Democorruptcy said:

They shift the cash into his capital account on the 10th of each month, so because he is withdrawing directly from his capital account, they reduces his ISA allowance by the same amount.

Then they are handling it incorrectly. Any dividends earned from shares held in an ISA are tax free. They can be used to purchase more shares in the ISA without affecting the annual allowance, if they are withdrawn then it should not have any affect on the annual allowance. 

The only time withdrawals from an ISA will affect the annual allowance is if they are withdrawn from the ISA and then paid back in. If @Bricks & Mortar's explanation of how HL deduct withdrawals from the annual allowance is correct then they are treating it incorrectly. 

[DurhamBorn]

4 hours ago, Bobthebuilder said:

I have been maxing out my ISA allowance since they first started, I did withdraw a big chunk in 2012 to buy a house, but have maxed out again since with no withdrawals. Only started taking some of those dreaded divis during the last tax year. I don't lose any allowance from the divis being paid only when I withdraw to my bank account. I will check next week.

I seem to remember @DurhamBorn has been taking divis from an ISA recently to pay for his dodgy massages, how does this work for him? Do you lose your allowance DB?

I dont use any new ISA allowance now so it does not matter to me.I just withdraw all divis from my ISA to live on because i cannot access my SIPP yet.Once i can i will decide how to withdraw depending on tax including IHT.I might run ISAs down more etc.You get £20k allowance in each year.It does not matter what you take out you get £20k in.You could pay £20k in and take £21k out in divis.The £20k allowance is set,taking divis out does not change it at all.

[Pip321]

1 hour ago, Bobthebuilder said:

Individual Savings Accounts (ISAs): Withdrawing your money - GOV.UK (www.gov.uk)

 

That is what I said gross/net….I think you are over thinking it. If I put in £20k into an ISA I have put £20k into an ISA….done. 

If I decide to take some out…..then I still have put £20k in. The fact I took some out still means £20k gross went it. 

The way you are thinking about it (and the link) is like describing it as though someone puts £20k into a box…..takes out £5k and then asking why there isn’t £20k in the box anymore. It’s still just £20k in….

Ignoring flexible ISA….that muddies the point. 

Edited March 31 by Pip321

[Bricks & Mortar]

8 minutes ago, sleepwello'nights said:

Then they are handling it incorrectly. Any dividends earned from shares held in an ISA are tax free. They can be used to purchase more shares in the ISA without affecting the annual allowance, if they are withdrawn then it should not have any affect on the annual allowance. 

The only time withdrawals from an ISA will affect the annual allowance is if they are withdrawn from the ISA and then paid back in. If @Bricks & Mortar's explanation of how HL deduct withdrawals from the annual allowance is correct then they are treating it incorrectly. 

Pretty sure I'm not the one who explained anything about HL.  

[Bobthebuilder]

7 minutes ago, DurhamBorn said:

I dont use any new ISA allowance now so it does not matter to me.I just withdraw all divis from my ISA to live on because i cannot access my SIPP yet.Once i can i will decide how to withdraw depending on tax including IHT.I might run ISAs down more etc.You get £20k allowance in each year.It does not matter what you take out you get £20k in.You could pay £20k in and take £21k out in divis.The £20k allowance is set,taking divis out does not change it at all.

So why does mine say this although I have paid nothing in this year? 

[sleepwello'nights]

1 minute ago, Bobthebuilder said:

So why does mine say this although I have paid nothing in this year? 

Did you pay £1990 in during the year? If you did then you have used part of your allowance if you didn't then whoever your ISA is with are wrong. 

[Shamone]

6 minutes ago, Bobthebuilder said:

So why does mine say this although I have paid nothing in this year? 

I did notice this anomaly when withdrawing divis a warning message says something like the allowance is affected. I had assumed it was just them getting it wrong. I’m pretty sure what @DurhamBorn says above is 100% correct.

Edited March 31 by Shamone

[sleepwello'nights]

6 minutes ago, Bricks & Mortar said:

Pretty sure I'm not the one who explained anything about HL.  

I thought you said in one of your posts that you had an ISA Awith HL. Apologies if I muddled up the posters on the topic.

[Bobthebuilder]

1 minute ago, sleepwello'nights said:

Did you pay £1990 in during the year? If you did then you have used part of your allowance if you didn't then whoever your ISA is with are wrong. 

Paid nothing in, so maybe they are wrong like many posters are saying.

[sleepwello'nights]

Stocks and shares ISA dividends: Key tax details explained – Finder UK

This link explains that dividends received in an ISA are tax free and if held in the ISA can be reinvested without affecting your annual allowance.

Do reinvested dividends count as an ISA contribution?

Finder expert Zoe Stabler answers

No, they don’t. Any dividends generated from investments held in your stocks and shares ISA will automatically stay within the ISA but won’t count as an additional contribution. The great news about this is that it means that dividend income will not count towards your current £20,000 yearly ISA allowance.

This applies whether you choose an investment that automatically reinvests dividends back into the fund (like an accumulation ETF) or if the dividends are distributed into your account as cash and you decide to reinvest them manually.

The key point is that you need to make sure these income-generating investments are held within your stocks and shares ISA account if you want to make the most of the tax benefits.

Edited March 31 by sleepwello'nights

[Calcutta]

I love HL, it's like they're not even trying sometimes. My kind of company. Just give us the fucking money and fuck off. 

[Harley]

21 minutes ago, Bobthebuilder said:

Paid nothing in, so maybe they are wrong like many posters are saying.

What a tiz ladies.

The mechanics of ISAs are quite clear.

So got to be a HL thing.

The £1,990 surely must relate to something regardless whether the right or wrong treatment.

Part of or all of the divs received in your ISA in the tax year?

Edited March 31 by Harley

[Harley]

24 minutes ago, Shamone said:

I did notice this anomaly when withdrawing divis a warning message says something like the allowance is affected. I had assumed it was just them getting it wrong. I’m pretty sure what @DurhamBorn says above is 100% correct.

Was it this (from the on-line HL instructions):

"Read the ISA withdrawal warning. If you understand you won't be able to pay this money back into your ISA without using part of your ISA allowance, select 'Yes, I understand the implications'"?"

You may be taking out divs but to them it's just a cash withdrawal.

Edited March 31 by Harley

[Loki]

14 minutes ago, Calcutta said:

I love HL, it's like they're not even trying sometimes. My kind of company. Just give us the fucking money and fuck off. 

The Mr Tourette school of customer service

 

Edited March 31 by Loki

[Bobthebuilder]

8 minutes ago, Harley said:

The mechanics of ISAs are quite clear.

So got to be a HL thing.

The £1,990 surely must relate to something regardless whether the right or wrong treatment.

 

Interesting, I took the £1,990 from divis for spending money.

No wonder this has been confusing today, I am starting to think you are all a figment of my imagination, or I am going mad.

5 minutes ago, Harley said:

Was it this (from the on-line HL instructions): "Read the ISA withdrawal warning. If you understand you won't be able to pay this money back into your ISA without using part of your ISA allowance, select 'Yes, I understand the implications'"?  You may be taking out divs but to them it's just a cash withdrawal.

I have to select "yes" and it then reduces my allowance.

 

Edited March 31 by Bobthebuilder

[Harley]

12 minutes ago, Bobthebuilder said:

Interesting, I took the £1,990 from divis for spending money.

Is this a HL thing or are you just taking some cash out of your ISA (and only from your POV is it coming from divs)?  All our ISA accounts have just the one account holding shares, etc and cash.

Unless they've got some weird process for crediting divs to your account, or the divs were odd (say Brazil), or you've managed to make a very clever mistake for which they should pay you a tester fee(!), I can't see their calc being correct which is amazing, even by their systems standards.

Edited March 31 by Harley

[DurhamBorn]

39 minutes ago, Bobthebuilder said:

So why does mine say this although I have paid nothing in this year? 

You must of paid in something.I draw all divis from mine and i still have the full £20k allowance

 

[Bobthebuilder]

3 minutes ago, DurhamBorn said:

You must of paid in something.I draw all divis from mine and i still have the full £20k allowance

 

Not paid a penny in this tax year, I will make a withdrawal tomorrow and post up the result.

Be nice to know if H&L have fucked this up.

[Shamone]

24 minutes ago, Harley said:

Was it this (from the on-line HL instructions):

"Read the ISA withdrawal warning. If you understand you won't be able to pay this money back into your ISA without using part of your ISA allowance, select 'Yes, I understand the implications'"?"

You may be taking out divs but to them it's just a cash withdrawal.

I think it was that.

[Bobthebuilder]

9 minutes ago, Harley said:

Is this a HL thing or are you just taking some cash out of your ISA (and only from your POV is it coming from divs)?  All our ISA accounts have just the one account holding shares, etc and cash.

Unless they've got some weird process for crediting divs to your account, or the divs were odd (say Brazil), or you've managed to make a very clever mistake for which they should pay you a tester fee(!), I can't see their calc being correct which is amazing, even by their systems standards.

@Democorruptcy said earlier that taking money from H&L income account might have a different result.

[Shamone]

1 minute ago, Bobthebuilder said:

@Democorruptcy said earlier that taking money from H&L income account might have a different result.

Can you take money from the income account? I thought it only came out of the capital one.

[Bobthebuilder]

Just now, Shamone said:

Can you take money from the income account? I thought it only came out of the capital one.

You have the option to automatically pay dividends into your linked bank account, I am going to try this with BATS next divi in May.

[Castlevania]

Are we still on ISA withdrawal chat? 

[Mandalorian]

Just now, Castlevania said:

Are we still on ISA withdrawal chat? 

I've been out of this chat for 4 hours.

I'm having withdrawal symptoms.