HMRC has clarified the legal rules that apply to ISAs, confirming that savers can hold and contribute to more than one stocks and shares ISA within the same tax year, as long as the total contributions do not exceed the £20,000 annual allowance.
The clarification came after a person contacted HMRC over social media to ask whether it is legal to have two or more stocks and shares ISAs and subscribe to more than one in the same tax year without exceeding the total allowance of £20,000.
HMRC response on multiple ISAs
In response, HMRC said: "You can have and contribute to more than one stocks and shares ISA within a tax year, as long as you don't exceed your total annual allowance across the contributions."
Savers can divide the allowance between the different types of ISAs available, including cash ISAs and stocks and shares ISAs. The rules were expanded in April 2024 so savers could contribute to more than one ISA of the same type in the same tax year. Previously, only one ISA of each type could be paid into during each financial year.
A major perk of ISAs is that they are entirely tax free, meaning no tax is paid on any investment growth or interest earnings within an ISA account.
Notable exception for Lifetime ISAs
There is one exception to this rule: only one Lifetime ISA (LISA) can be paid into during each tax year, although multiple LISA accounts can be held. A LISA is intended for saving towards a first home or for later life.
Up to £4,000 a year can be deposited into a LISA, with a 25 per cent Government bonus on top of deposits, meaning up to £1,000 a year in bonuses. The funds can only be used to buy a first home worth under £450,000, or accessed once the account holder turns 60. Withdrawals for any other reason incur a 25 per cent penalty.
A LISA can only be opened between the ages of 18 and 38, and deposits can only be made up to the age of 50, leaving a 10-year period with no contributions before the funds can be accessed.
ISA allowance changes from 2027
The Government announced at the August 2025 Budget that it would get rid of the LISA and replace it with a product solely for saving towards a first home.
Another major policy change for ISAs was announced by former Chancellor Rachel Reeves as part of her Autumn Statement 2025. From April 2027, the current £20,000 allowance is to be effectively cut. Anyone under 65 will only be able to deposit up to £12,000 a year as they choose, with the other £8,000 only available for deposits into investment-based accounts, no longer for cash deposits. Those aged 65 and over will keep the current £20,000 allowance.
