I have a stocks and shares maxi ISA in which I invested a lump sum 6 years ago. All dividends are automatically reinvested in the funds and used to purchase extra units. The divedends are normally paid about twice a year.

I haven't been actively paying in any extra cash to this investment for a few years, the only activity in the funds are the reivested dividends.

I plan to open a cash ISA with my bank before the end of the tax year and put in a lump sum of £3000.

My question is: Am I allowed to do this? Or does the fact that the reinvested dividends in my old ISA mean that I already have invested in an ISA for this tax year and therefore can't open another one?

Hammer2003 wrote:
My question is: Am I allowed to do this? Or does the fact that the reinvested dividends in my old ISA mean that I already have invested in an ISA for this tax year and therefore can't open another one?

Hi, reinvested dividends do not count as new contributions. So yes you can open BOTH a cash ISA AND a stocks and shares mini isa before the start of the new tax year.

So thats £3k in a cash ISA and £4k in a shares ISA.

Many thanks for the prompt reply