New ISA/ savings account

eeetee

OK, So I have been looking up a place to put my old Icesave ISA funds in, and have a couple of questions.

I understood that should I want to open another ISA, in effect I would be transfering from one to the other, despite the fact that, as of now i don't actually have an ISA. Is this the case?

I assume i have to invest the whole balance from the old ISA, but what would happen if I were to open a new ISA from scratch, ie not 'transfer' from the Icesave? You see i would like to reinvest a smaller amount into a fixed rate ISA, and wondering if this can be done. Also, I read on the reinstatement certificate that any reinvestment has to be done in this financial year, otherwise it looses its tax free status, but in practice, what does this mean?

Baldur

eeetee wrote: »

I understood that should I want to open another ISA, in effect I would be transfering from one to the other, despite the fact that, as of now i don't actually have an ISA. Is this the case?

Yes, it will be treated as an ISA transfer.

I assume i have to invest the whole balance from the old ISA, but what would happen if I were to open a new ISA from scratch, ie not 'transfer' from the Icesave? You see i would like to reinvest a smaller amount into a fixed rate ISA, and wondering if this can be done.

You can transfer as much of the Icesave Cash ISA funds as you wish - up to the amount shown on your certificate from the FSCS.

Also, I read on the reinstatement certificate that any reinvestment has to be done in this financial year, otherwise it looses its tax free status, but in practice, what does this mean?

If you don't reinvest your Icesave funds in the current tax year, you will have to start again from scratch after the 6th April 2009, i.e. you will lose the ongoing tax-free earnings potential of the Icesave Cash ISA funds.

eeetee

Thankyou for your reply Baldur, so I understand that were I not to reinvest the money in this financial year, I would be limited to puting in up to the limit, which currently is £3600?

I was hoping that it wouldn't be classed as a transfer as I had problems when transfering over to Icesave, but i think you are right, despite the fact that the money is sat in my current account. I will probably opt for the Cheshire's 12 fixed rate, and hopefully they will open it before the rate drop, although I don't suppose they will :rolleyes: