Cash ISA Discussion/Question

System

I have just organised a transfer from an old C&G cash ISA into my newly-opened IF cash ISA. The woman at C&G who dealt with my transfer didn't fill me with confidence as she initially told me that I couldn't transfer and would have to close my account first. Luckily, I knew this wasn't so and asked her to check with Head Office. She then spent 15 mins looking for the right form, but it did eventually get sent off (I hope).

My question is....does the interest earnt so far on my C&G ISA also transfer, or will I receive that as a cheque (or payment into nominated bank account)? The woman told me it transfers, but I don't know whether to believe her or not, in the circumstances. Also, my C&G interest is paid annually, so I have assumed that I won't be losing out by not waiting until 1st April before the transfer. Is this right!

I've also had no joy when trying to get through to IF on the phone. I gather that demand for their cash ISA has exceeded expectations and they're snowed under...

ta.

Darryl

KTK

The entire value (your payments plus interest) of your C&G ISA should be transferred to IF.

Darryl.

System

splendid....Thanks Darryl!

I love this place.....

System

As a non tax payer is it advantageous to put £3k into a cash ISA before end March this tax year followed by £3k next year? I envisage that I will become a tax payer within the next year or two.

If not any advice on where I would get better tax free deal would be useful

Thanks ???

lisyloo

You will get no immediate benefit as you should not have to pay any tax anyway at the moment.
However it will be beneficial when you become a taxpayer as that money will be shielded from tax and it therefore makes sense to use the allowance now rather than loose it.

You should be currently able to get tax free savings anywhere by filling out an R85 form.
However in an oridinary account you would start paying tax when you became a tax payer.

emma99_2

Hi,

I need some advice with this ISA issue...

I currently have an HSBC ISA (3.35%) and an ING Direct Account (4.5%). All my savings (less than £3000) are in ING DIrect presently. Is it better to put them in the ISA even though the interest is so much lower?

I do not want to open a new ISA with a higher interest rate as ive just opened a whole lot of new accounts and my credit score isnt great so dont want to damage it further.

Thanks for any help you can give me

Emma

Darryl

Emma

Firstly, opening new savings accounts won't affect your credit rating. What goes on your credit file are details of borrowings (mortgages, loans, credit cards, etc), not savings.

So, there's nothing to stop you opening a new cash ISA with a better rate than your HSBC ISA.

Now,  a couple of questions for you:

Q1. Are you likely to be needing to use your savings in the next year? If so, putting your savings into an ISA will use up your tax-free allowance for the year. If you take you money out of an ISA, you can't put it back in later (in the same tax year).

This doesn't stop you from having an ISA, it's just something to think about. For example, I use ISAs for emergency fund savings, or savings I'll use in 2 years time. Other savings (home improvement, holidays, etc) I put into normal savings accounts.

Q2. How much do you have in your HSBC ISA? More specifically, how much have you added to it since April last year?

If your answer is less than £3000, then you can add the difference to your ISA before 5 April 2004, and then add the rest (up to £3000) into the ISA from April 6th.

Hope this helps

Darryl.

tifferlees

???
Hi All

This is my first post and fairly new to Martin's Website - awesome!!

Anyway, I have followed Martin's advice and opened an ISA this week (with M&S) so I do not miss out on this years tax allowance. Can someone please please answer my confusion?
1. What is the main advantage of opening an ISA now when there is only a few days left of the tax year. Because if I put the maximum amount of £3k into the ISA I will have only this short space of time to receive a tax free amount. Is my thought process correct or have I missed the point.

Cheers

Chris

lisyloo

What is the main advantage of opening an ISA now when there is only a few days left of the tax year.

The advantage is that you have used the allowance for the tax year April 2003 til April 2004.
You have not used next years allowance.
So come next tax tear (April 6th 2004) you will have another £3K allowance.

I will have only this short space of time to receive a tax free amount. Is my thought process correct or have I missed the point.

Yes you have missed something.
You will receive tax free interest on this amount until you take it out or you die.

If you just leave it in the ISA then the all the interest you receive from now on will be tax free.

tifferlees

Forever, I start to see now!!
Does this mean that I can add monies after 5th if for eg. I placed only £1k in before the 5th or is the remaining £2k worth of allowances "lost" :-/?
If it is "lost" then effectively you would start afresh on the 6th of each year with a new allowance. Is that right?

Chris

Hope that makes sense!