Splitting an Icesave ISA

tiptoe_mouse

Well, I've applied for my Icesave compensation, and am awaiting the transfer and the certificate. In the meantime I'm checking out the options for which ISA to transfer to. Or ISAs. Herein lies my question:

Can I put part of my Icesave money into one ISA, and part into another? If so, how do I go about it? How will each provider know how much of the compensation I've deposited in the other, if you see what I mean?

I fancy splitting it between Halifax fixed 5%, and Natwest. I don't want to put it all in one ISA and then move part of it out (which would seem to be the simplest solution) since this would delay things and I want to grab the Halifax rate as soon as my certificate arrives (that's if it hasn't been pulled by then).

Thanks,

tiptoe

Baldur

As far as the HMRC guidance goes, partial transfers of previous tax years' Cash ISA funds are permissible but current tax year's funds must be transferred whole. ISA managers are not, however, obliged to accept partial transfers (or indeed any transfers).

The snag that you may hit is the ISA certificate, as both of your prospective new providers are likely to require the original for their records - see HMRC Bulletin http://www.hmrc.gov.uk/ISA/bulletin6-2008.htm

Milarky

Baldur wrote: »

As far as the HMRC guidance goes, partial transfers of previous tax years' Cash ISA funds are permissible but current tax year's funds must be transferred whole. ISA managers are not, however, obliged to accept partial transfers (or indeed any transfers).

The snag that you may hit is the ISA certificate, as both of your prospective new providers are likely to require the original for their records - see HMRC Bulletin http://www.hmrc.gov.uk/ISA/bulletin6-2008.htm

ISA providers wishing to receive deposits from these customers will need to:Obtain the original certificate from the individual, and retain it (or an imaged copy).

This appears to provide the means; take the original to one ISA provider and ask them to take 'an imaged copy' (which will satisfy HMRC) so you can then take the original to the second ISA provider. They should also provide a letter saying how much you intend to invest with them (perhaps a copy of your application to them) so that the second ISA provider can be assured that only the total permitted on the certificate is being invested between each one. In principle you could do this for an indeterminate number of ISA providers.

Alternatively, it would be easy enough to go to Natwest and deposit the full amount and then immediately instigate a transfer to Halifax (taking advantage of their 60 day window on rates if attractive) as the Natwest is instant access and you can be confident the cheque in would be cleared and available before any transfer. Also Halifax will cover the interest during any transfer to them - so you can't lose out there.

tiptoe_mouse

Milarky wrote: »

This appears to provide the means; take the original to one ISA provider and ask them to take 'an imaged copy' (which will satisfy HMRC) so you can then take the original to the second ISA provider. They should also provide a letter saying how much you intend to invest with them (perhaps a copy of your application to them) so that the second ISA provider can be assured that only the total permitted on the certificate is being invested between each one. In principle you could do this for an indeterminate number of ISA providers.

Sounds like a possibility (although I suspect this scenario will just confuse some banks further - seems like many don't yet understand the Icesave situation, judging by other threads). Has anyone invested their ISA compensation in another ISA yet? If so, did they hang on to your certificate?

Alternatively, it would be easy enough to go to Natwest and deposit the full amount and then immediately instigate a transfer to Halifax (taking advantage of their 60 day window on rates if attractive) as the Natwest is instant access and you can be confident the cheque in would be cleared and available before any transfer. Also Halifax will cover the interest during any transfer to them - so you can't lose out there.

What do you mean by the 60 day window on rates at the Halifax?

Thanks,

tiptoe

P.S. The compensation has now arrived in my account (just checked it), but the certificate could take another two weeks as I understand it.

Baldur

tiptoe_mouse wrote: »

......the certificate could take another two weeks as I understand it.

From posts elsewhere in these forums, people appear to be receiving different information from calls to the FSCS - ranging from an ETA of late December to 'no definite date'.

See http://forums.moneysavingexpert.com/showthread.html?p=16417345#post16417345

tiptoe_mouse

Baldur wrote: »

From posts elsewhere in these forums, people appear to be receiving different information from calls to the FSCS - ranging from an ETA of late December to 'no definite date'.

See http://forums.moneysavingexpert.com/showthread.html?p=16417345#post16417345

Looks like I'd better stash the compensation in an ordinary savings account for the time being. Luckily I opened an egg account back in June paying 6.3% fixed for 12 months. Course I had no idea back then how valuable it would be.

Does anyone know how long we can wait before reinvesting our Icesave money in a new ISA?

tiptoe

Baldur

tiptoe_mouse wrote: »

Does anyone know how long we can wait before reinvesting our Icesave money in a new ISA?

Has to be deposited in an ISA account by 5th April 2009 in order to retain its tax-free status - http://www.fscs.org.uk/files/documents/pdfs/hwcpsfdyckkfdzm.pdf

33. Will I lose the tax status on my ISA?
The money you held in your ISA will not lose its tax-free status if you follow this process. An ISA certificate will follow by post to allow you to reinvest that sum in an ISA with another provider by 5 April 2009. You should receive your ISA certificate within 2 weeks of claiming compensation using the electronic process and you will have to give this certificate to your new ISA provider when you open your ISA with them. You should ask for an ISA transfer form from your new ISA provider.

charliesgranny

Hope I am responding correctly ad this is my first time. I would like to know if we have to reinvest all the ISA cash we have had refunded to retain ISA status.

Baldur wrote: »

Has to be deposited in an ISA account by 5th April 2009 in order to retain its tax-free status - http://www.fscs.org.uk/files/documents/pdfs/hwcpsfdyckkfdzm.pdf

Baldur

charliesgranny wrote: »

Hope I am responding correctly ad this is my first time. I would like to know if we have to reinvest all the ISA cash we have had refunded to retain ISA status.

Are the Icesave funds from previous tax year/years or current tax year?

If current tax year funds, they have to be transferred whole, in order to meet HMRC guidance.

Partial funds from previous tax years can, in normal circumstances, be transferred under HMRC gudelines but not all ISA managers will accept partial transfers (or any transfers, in some cases). Whether this will apply to former Icesave funds remains to be seen.

charliesgranny

Baldur wrote: »

Are the Icesave funds from previous tax year/years or current tax year?

If current tax year funds, they have to be transferred whole, in order to meet HMRC guidance.

Partial funds from previous tax years can, in normal circumstances, be transferred under HMRC gudelines but not all ISA managers will accept partial transfers (or any transfers, in some cases). Whether this will apply to former Icesave funds remains to be seen.

Thanks for that information. The funds are from several previous years so i guess I will have to shop around. We are currently undecided about whether to reinvest the lot or pay some off a 'buy to let' mortgage we have.

edda

Have been trying to get an answer on the question of splitting an Icesave ISA into 2 or more accounts for weeks.

When asked if they could issue more than one certificate, the FSCS told me:

We are only able to issue one certificate per ISA

But then, they also said:

You should receive your ISA certificate within 2 weeks of claiming compensation