Splitting an ISA

Meggymay

Hi, Can anyone tell me if it is possible to split a cash isa. I have well over the £35,000 limit - consisting of a merged isa and toisa. Is it possible to move part of this isa to another company or must I just take the money out and re invest in something else.
thanks

dunstonh

You can split ISAs that have been made in past years contributions. You cannot split the current year contribution.

If you want to invest in something else you can now transfer cash ISAs into investment ISAs (although not the other way round) either in part or full. There is no reason to withdraw the funds to then invest them as the investment ISA would typically be the best/first option to use.

SavingsSearcher

Hi, I am in the same situation as Meggymay and wish to transfer some of my Cash ISA to another financial institution in order that I don't exceed the £35K compensation protection limit. It sounds as though it is feasible to transfer part of a cash ISA (the part that has been developed in previous tax years) to another cash ISA with an alternative provider. Is anyone able to confirm this please ?

Paul_Herring

Most application forms for transfers of Cash ISA's have a section where you state how much you want to transfer (and usually includes an option which effectively states 'the whole lot, including any interest on closure of the account.')

Simply put how much you want to transfer in the box. (Natwest one: http://www.natwest.com/content/personal/savings/isas/downloads/transfer_service.pdf)

Beware, however, that some application forms suggest that they will only take the ISA in it's entirety (Like this H&L one: https://www.h-l.co.uk/our-services/isa_literature/document/Cash%20ISA%20-%20Transfer%20Form/online/1) - ensure that your chosen new provider will permit partial transfers.

SavingsSearcher

Thanks for your help Paul

runciblespoon

Some accounts won't allow partial transfers out, and some won't allow any transfers in. In this case I think you'd have to transfer the whole to an account that does allow them, and then do two partial transfers out to the two destinations. Probably to avoid hassle I'd keep one of these transfers in the same institution. For example:

Provider A: £5000, no partial transfers
transfer to
Provider B Instant Access: £500, partial transfers allowed
straightaway split - partial transfer £2000 to Provider C
£3000 remains in Provider B Instant Access, transfer to Provider B Notice Account.

This is quite a pain, and costly in lost interest. I wish all institutions would allow partial transfers.

Lopo

Have been through this process, proved to be a nightmare and complex for no particular reason - banks are stoooopid.

Ended up getting compensation to the tune of £600+ as a result of fumblings by the bank. I requested a partial transfer to another new provider using the forms etc correctly, my original bank ignored the ammount and decided to transfer the whole thing without my consent or atempting to contact me to verify details on what they could or could not do.

Chaos ensued, ALL funds ended up in the new provider as a Fixed rate cash isa with a 3 month interest penalty loss if I needed to access any of the the funds.

So I gave my original bank no end of grief and was pretty much asked by them to decide how much compensation I wanted,...within reason, I came up with the above figure and backed it up with what a penalty on what withdrawing would have cost me as all the funds were now effectively fixed rate locked in.

Could be quids in if I dont need to touch the money, but may well need to in a couple of months....give em hell if you get grief!

Whole scenario took 7 weeks to get to a decent resolution.

Dont let up if it goes wrong, hold them accountable...

SavingsSearcher

Hopefully I won't have too much hassle as my original Cash ISA was with the Abbey who allow partial transfers out with no exit penalty and I am transferring part of my Cash ISA to NatWest who allow partial transfers in and are going to administer it all for me. Fingers crossed !

Paul_Herring

Lopo wrote: »

Ended up getting compensation to the tune of £600+ as a result of fumblings by the bank.

Would it be too much to hope that the compensation ended up in the ISA, or did it end up in a current account etc.?

Lopo

Paul_Herring wrote: »

Would it be too much to hope that the compensation ended up in the ISA, or did it end up in a current account etc.?

Ended up in a Current Account - which is perfectly understandable to be honest, bearing in mind I did not have the ISA with the original provider anymore since they had seen to that nicely with an axe! Swiftly moved elsewhere though...

Initial offer they proposed was for a laughable £10 by some first level minion highly expertly trained, talented and skilled in the mystical arts to vastly waste your time, upped it to a pittance of £25 eventually having eventually been escalated to a senior minion, then surprisingly £100...and then once they realised I had them clearly caught out using their own Terms, I gave them my figures...they coughed up the readies by the next day, making me wonder if I could have rinsed them for more, but I was happy enough by then...

Its all good as long as I dont need to access the funds until April...depends, either way...no losses incurred with a view to a gain perhaps...

runciblespoon

If you had to withdraw early, could you offer to pay the penalty out of non-ISA money?