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  • FIRST POST
    • GingerBob
    • By GingerBob 12th Mar 17, 10:57 PM
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    GingerBob
    Closing an ISA after transfer
    • #1
    • 12th Mar 17, 10:57 PM
    Closing an ISA after transfer 12th Mar 17 at 10:57 PM
    Moving my ISA savings from First Direct to Virgin Money to get their 1.01 %. I'm not using the ISA transfer service (too much messing about). I'll be emptying the FD ISA. Am I obliged to close it?
Page 1
    • YorkshireBoy
    • By YorkshireBoy 12th Mar 17, 11:02 PM
    • 29,321 Posts
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    YorkshireBoy
    • #2
    • 12th Mar 17, 11:02 PM
    • #2
    • 12th Mar 17, 11:02 PM
    Moving my ISA savings from First Direct to Virgin Money to get their 1.01 %. I'm not using the ISA transfer service (too much messing about). I'll be emptying the FD ISA. Am I obliged to close it?
    Originally posted by GingerBob
    You won't be allowed to empty it by making a withdrawal as you intend to do, according to your T&Cs. So, yes, you'll be obliged to close it.
    • GingerBob
    • By GingerBob 12th Mar 17, 11:06 PM
    • 3,615 Posts
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    GingerBob
    • #3
    • 12th Mar 17, 11:06 PM
    • #3
    • 12th Mar 17, 11:06 PM
    You won't be allowed to empty it by making a withdrawal as you intend to do, according to your T&Cs. So, yes, you'll be obliged to close it.
    Originally posted by YorkshireBoy

    I'll take the money out to my FD current account first, then send it to the new ISA. I'm just wondering about the tax position if I left it open.
    • YorkshireBoy
    • By YorkshireBoy 12th Mar 17, 11:08 PM
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    YorkshireBoy
    • #4
    • 12th Mar 17, 11:08 PM
    • #4
    • 12th Mar 17, 11:08 PM
    I'll take the money out to my FD current account first, then send it to the new ISA. I'm just wondering about the tax position if I left it open.
    Originally posted by GingerBob
    I think you should read your account T&Cs. You won't be able to remove all of it...no matter where you withdraw it to.
    • karcher
    • By karcher 12th Mar 17, 11:10 PM
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    karcher
    • #5
    • 12th Mar 17, 11:10 PM
    • #5
    • 12th Mar 17, 11:10 PM
    C&P from MSE ISA Transfer guide:

    Don't take the money out , ask the new provider to transfer it for you

    Transferring an old ISA is a technical process, it's not just like switching a normal savings account. Yet as long as you abide by the golden ISA transfers rule, it should go smoothly.

    If you want to transfer, never, ever, ever, withdraw money from a cash ISA!
    You'll immediately lose all the lasting tax benefits.

    Instead, speak to the new provider and fill out an ISA transfer form. Your new company should then sort it all out, including moving the money over for you, keeping your ISA cash permanently tax-free.
    • dales1
    • By dales1 12th Mar 17, 11:10 PM
    • 21 Posts
    • 14 Thanks
    dales1
    • #6
    • 12th Mar 17, 11:10 PM
    • #6
    • 12th Mar 17, 11:10 PM
    It's usually much better to use the transfer service, to avoid wasting your ISA allowance.

    If you cash in and reinvest, you need to keep the reinvestment within your ISA allowance that is remaining this financial year.

    Dales.
    • GingerBob
    • By GingerBob 12th Mar 17, 11:20 PM
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    GingerBob
    • #7
    • 12th Mar 17, 11:20 PM
    • #7
    • 12th Mar 17, 11:20 PM
    I think you should read your account T&Cs. You won't be able to remove all of it...no matter where you withdraw it to.
    Originally posted by YorkshireBoy
    Forgot to say, I'll be taking the money out in this tax year, and reinvesting it after 4 April or whatever the date is. Why would I not be able to take it all out to my current account? I've done that previously. What if I needed access to all the funds?
    • YorkshireBoy
    • By YorkshireBoy 12th Mar 17, 11:24 PM
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    YorkshireBoy
    • #8
    • 12th Mar 17, 11:24 PM
    • #8
    • 12th Mar 17, 11:24 PM
    Why would I not be able to take it all out to my current account?
    Originally posted by GingerBob
    Because the FD Cash ISA T&Cs say you can't. Do you have a different set of T&Cs to those published on their website?
    What if I needed access to all the funds?
    At the risk of giving you a massive clue, you can't be short of £1.
    • GingerBob
    • By GingerBob 12th Mar 17, 11:36 PM
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    GingerBob
    • #9
    • 12th Mar 17, 11:36 PM
    • #9
    • 12th Mar 17, 11:36 PM
    Because the FD Cash ISA T&Cs say you can't. Do you have a different set of T&Cs to those published on their website?At the risk of giving you a massive clue, you can't be short of £1.
    Originally posted by YorkshireBoy

    The T&Cs say that I can.
    • YorkshireBoy
    • By YorkshireBoy 12th Mar 17, 11:38 PM
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    YorkshireBoy
    The T&Cs say that I can.
    Originally posted by GingerBob
    That's good then. You have a different set of T&Cs to those published on their website. But why would you not want to close it having emptied it?
    • GingerBob
    • By GingerBob 12th Mar 17, 11:42 PM
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    GingerBob
    That's good then. But why would you not want to close it having emptied it?
    Originally posted by YorkshireBoy

    I've had it open for a few years, sometimes using it, sometimes not. If they were to up the interest rate at some point in the future it would still be available. However, let's clarify my question: do HMRC permit you to hold any number of empty ISAs?
    • colsten
    • By colsten 12th Mar 17, 11:44 PM
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    colsten
    In the times it took to post the questions, you could have filled in the Virgin transfer form. You'd then not have any old account hanging about, and there would be no questions over whether you are breaking any ISA rules.
    • YorkshireBoy
    • By YorkshireBoy 12th Mar 17, 11:50 PM
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    YorkshireBoy
    I've had it open for a few years, sometimes using it, sometimes not. If they were to up the interest rate at some point in the future it would still be available.
    Originally posted by GingerBob
    It's more likely (indeed certain?) that they wouldn't lift the rate on this product. Instead they'd launch a new product. Which is why I asked why you'd want to leave it open.
    However, let's clarify my question: do HMRC permit you to hold any number of empty ISAs?
    Maybe try the HMRC website?
    • Vortigern
    • By Vortigern 12th Mar 17, 11:58 PM
    • 2,236 Posts
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    Vortigern
    I'll be emptying the FD ISA. Am I obliged to close it?
    Originally posted by GingerBob
    You're not obliged to close it, but if you close it they'll pay interest up to the date of closure.

    If you don't close it, they'll pay interest on the usual date.
    • jimjames
    • By jimjames 13th Mar 17, 1:50 PM
    • 11,931 Posts
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    jimjames

    If you want to transfer, never, ever, ever, withdraw money from a cash ISA!
    You'll immediately lose all the lasting tax benefits.
    Originally posted by karcher
    A very old guide that is quite out of date now. While it might have been true a few years ago when the allowance is £20k per year, if you aren't using that up there is zero advantage in transfer if your amount is below that. In fact in some circumstances it's actually better to withdraw and pay in as it avoids charges and allows you to utilise accounts that don't allow transfer. Obviously only applies if the amount is below £20k. I've moved funds from S&S ISAs as cash outside the ISA wrapper because it means I don't pay exit fees.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • isasmurf
    • By isasmurf 13th Mar 17, 2:34 PM
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    isasmurf
    I've had it open for a few years, sometimes using it, sometimes not. If they were to up the interest rate at some point in the future it would still be available.
    Originally posted by GingerBob
    But you wouldn't be able to use it as you would have subscribed to another ISA, and if you went a full tax year without putting money into it, you would need to fill out a re-activation form to restart using it.
    • Gadfium
    • By Gadfium 13th Mar 17, 2:49 PM
    • 615 Posts
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    Gadfium
    . I'm not using the ISA transfer service (too much messing about).
    Originally posted by GingerBob
    But posting on an internet forum and debating the Terms and Conditions with a bunch of strangers is less "messing about"?? Really?

    Transferring means posting one piece of paper and letting the new ISA provider doing the work. How is that too much hassle?

    Doing it your way means losing the allowance for next year. I can't see any circumstances where doing it your way and losing a years ISA allowance is less "messing about" and makes more sense than using the transfer service.
    • GingerBob
    • By GingerBob 13th Mar 17, 3:27 PM
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    GingerBob
    But posting on an internet forum and debating the Terms and Conditions with a bunch of strangers is less "messing about"?? Really?

    Transferring means posting one piece of paper and letting the new ISA provider doing the work. How is that too much hassle?

    Doing it your way means losing the allowance for next year. I can't see any circumstances where doing it your way and losing a years ISA allowance is less "messing about" and makes more sense than using the transfer service.
    Originally posted by Gadfium

    Because I don't particularly want next year's allowance. I have just over £15k in the current FD investment. My plan is to keep approximately that amount in an ISA (coincidence that the allowance is around that figure). I just want 1% on 15K, rather than the 0.5% I'm currently getting. Other money is invested elsewhere, including current accounts.


    However, all things considered - including the 20th century ISA transfer feature of having to print out a pdf, fill it in manually, and then post it off (!) - I will, nevertheless do this, just to keep all my options open. I suppose the one redeeming feature from my point of view is that my wife's ISA, which we are also transferring to Virgin Money, can be handled in the same way and can go in the same envelope, thus saving one stamp (I assume Virgin will be able to handle two transfer applications in the same envelope, but who knows).


    This business of not being able to take all the money out of an ISA - not sure where that comes from, but it is categorically wrong.


    Thanks for all the above posts.
    • roxy28
    • By roxy28 13th Mar 17, 5:27 PM
    • 598 Posts
    • 57 Thanks
    roxy28
    But you wouldn't be able to use it as you would have subscribed to another ISA, and if you went a full tax year without putting money into it, you would need to fill out a re-activation form to restart using it.
    Originally posted by isasmurf
    Would you need to re-activate the ISA before a transfer to another provider, but not add to it this tax year once its there.
    Last edited by roxy28; 13-03-2017 at 5:33 PM.
    • YorkshireBoy
    • By YorkshireBoy 13th Mar 17, 6:46 PM
    • 29,321 Posts
    • 17,097 Thanks
    YorkshireBoy
    This business of not being able to take all the money out of an ISA - not sure where that comes from, but it is categorically wrong.
    Originally posted by GingerBob
    It comes from the FD "Cash ISA KeyFacts and T&Cs" on their website, as I told you last night. Condition 3.2 (at the foot of page 7) in that document differs from that in the T&Cs in your possession, as it later transpired. I'm not sure why though, since they're the most recent, effective 6th April 2016.
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