Stupid ISA questions

SP123_3

Can you open a new ISA, and switch an existing ISA, in the same tax year? What I mean is, if I have an ISA this year with Bank A, then open a new one next tax year with Bank B, can I transfer them both to Bank C who's offering better rates a few months later ?

Also, if you switch an ISA, can you onlyswitch the amount invested or can you also switch the interest received?

Does the interest received, if paid ino the ISA account, count towards your ISA limit for the next tax year?

Thanks!

alastair_h

Yes you can. Transfers don't count as contributing (paying in) to an ISA.

You can transfer the balance and any interest earnt up to that point.

No the interest doesn't count towards next years isa limit.

Baldur

SP123 wrote: »

Can you open a new ISA, and switch an existing ISA, in the same tax year? What I mean is, if I have an ISA this year with Bank A, then open a new one next tax year with Bank B, can I transfer them both to Bank C who's offering better rates a few months later ?

Yes - the word to remember is 'transfer', rather than 'switch'. ISA transfers can take place at any time.

Also, if you switch an ISA, can you onlyswitch the amount invested or can you also switch the interest received?

The full balance of the ISA (amount subscribed and interest earned) can be transferred.

Does the interest received, if paid ino the ISA account, count towards your ISA limit for the next tax year?

No.

Remember that transfers have to be initiated by the new ISA provider - you can't transfer the funds yourself.

SP123_3

Thanks!

I diidn't realise there was a difference between a 'transfer' and a 'switch' - can someone explain this?

alastair_h

Transfer is the correct term, switch is not a term I've heard of when related to ISA's.