Splitting a cash isa? Help please!

My father has £80,000 in a cash isa which was opened May this year - £79,000 was transferred from a previous ISA and £1000 has been added this tax year.


When the new safe limits come in, can he open a new isa and transfer £5000 to the new provider? (Leaving £75000 with the existing provider) Or is this prohibited because he has already put money into the existing provider this year?



I thought I understood ISAs but I`m getting very confused

Comments

  • eskbanker
    eskbanker Posts: 30,225
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    janeke wrote: »
    When the new safe limits come in, can he open a new isa and transfer £5000 to the new provider? (Leaving £75000 with the existing provider) Or is this prohibited because he has already put money into the existing provider this year?
    Transfers of current year funds in cash ISAs can be done at any time in any year, provided that:
    1. all current year subscriptions are kept together
    2. they're not in fixed rate products with withdrawal restrictions
    3. the transfer is into an ISA that accepts inbound transfers
    Cash ISA providers are meant to have transitional arrangements in place this year for the forthcoming reduction in FSCS limit so check with the relevant provider. Worth a read of this thread too, in which it's considered that this concession only applies before the new limit comes in rather than afterwards.
  • janeke
    janeke Posts: 100 Forumite
    Sorry but I still don`t understand. If father only transfers this year`s funds (£1000) that will still leave him with above the new safe limit with the original provider
  • eskbanker
    eskbanker Posts: 30,225
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    janeke wrote: »
    Sorry but I still don`t understand. If father only transfers this year`s funds (£1000) that will still leave him with above the new safe limit with the original provider
    He can transfer more than £1000, the stipulation is that all current year subscriptions have to stay together, i.e. they can't be subdivided. It's a bit of a moot point anyway in his scenario of the vast bulk being made up of prior year subscriptions, so in his case he can transfer £5K without any issue, but at transfer time he should be clear about whether that includes this year's £1K in case he wants to subscribe any more to the new ISA before April....
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