Transfer S&S ISA and subscribe in same year

rama0927
rama0927 Posts: 65
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edited 28 October 2017 at 4:52PM in ISAs & tax-free savings
Hello All. Interactive Investor recently bought TD Direct Investing, the platform I use for my Stocks and Shares ISA. The re-branding is almost complete and with it comes a monumental rates rise for small investors like myself.

Previous fee structure was £0/trade (regular investment) and 0.3% fee pa, of your account holdings. New fee structure £1/trade and £22.50 fee per quarter (£90 pa). For someone just starting out this is no good at all.

I plan to transfer my S&S ISA to another platform with more competitive pricing, or I may transfer it to Nutmeg if nothing takes my fancy.

My question is if I transfer my current tax year S&S ISA in it's entirety and close the original account, am I allowed to subscribe (pay money in) to a new provider? Or is it still not allowed in this case?

I realise that the rules say you can only subscribe to one ISA of each particular type per year, but I'm not sure of transferring out. For clarity I have already subscribed to TD Direct Investing this year before the unforeseen rates hike. If I can't transfer and pay into a new one, the rules are pretty anti-competitive and restrictive!

Thanks for your help.

Comments

  • Alexland
    Alexland Posts: 9,653
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    edited 28 October 2017 at 7:38PM
    I have our LISAs with Nutmeg (fixed allocation 0.45% platform and 0.17% average fund fee = 0.62% total) and they are ok but for an ISA the fees for Vanguard Investor direct S&S ISA are better (at only 0.15% platform and a LifeStrategy fund would be 0.22% = 0.37% total and has a similar asset allocation). I recently moved my Nutmeg ISA to Vanguard for the lower fees and continued contributing. Happy with the service from both and neither platform have trade or exit costs.

    A transfer does not count as a new contribution but if you have contributed into the S&S ISA this year you will be able to transfer and continue contributing with the new provider. The old provider will tell your new provider how much you have contributed so far this tax year so they can determine how much more you can contribute.

    Although neither S&S ISA providers really know how much you can contribute as you might have other types of ISA with other providers but that was how it was supposed to work before the landscape got complicated with options but if you get it wrong HMRC might hunt you down, burn your clothes and fire sharp paper clips at you.

    Alex
  • Thanks Alex, for confirming I can transfer my S&S ISA to a new provider and subscribe to the new provider (not just transfer existing capital).

    Yes I started out on Nutmeg myself in 2016 (S&S ISA@7/10 risk), it is a great option however I was a little disappointed with the return and I am not a very casual investor, I am interested in committing more time to it. So in April 2017 I stopped funding Nutmeg (but keep the capital there... need to give it more of a chance than 1 year!), and opened an S&S ISA where I get to pick the funds and make a saving on their fully managed platform fee of 0.75% pa.

    50% of my holdings are with Vanuard LS60 as my core, but the other 50% of my holdings are from other managers. Therefore it is not easy for me to just switch to Vanguard to take advantage of their market leading account holding fee of 0.15%. I will have to go with Cavendish who do it at 0.35% if I want to keep hold of my variety.

    Once again thanks for your help :beer:

    EDIT: I am very mindful of the ISA limits in place, I do not want to find a horses head in my bed or receive a strongly worded letter!
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