Confused about ISA Transfers

Jam78

Hi,

As we approach the end of the financial year I'm turning my attention to taking out another ISA. So that's no problem, find the best rate and apply.

What I am confused about is that I have two cash ISA's from previous years and I should really transfer these to the best rate I can find. So here's my question. When transfering ISA's from previous year to a provider that accepts transfers, do they retain the tax year they were taken out in?

By this I mean does a 07/08 and 08/09 ISA remain as this when transfered in to a product being offered at the moment or do they become 09/10? Does transfering mean that you can't take out a new cash ISA for 09/10?

Thanks in advance, I'm sure this has been answered many times before, if it has please point me in the right direction.:)

rb10

Transferring ISAs doesn't count as paying money in - so after you've done this, you'll still have your full (£5100) 2010/11 allowance remaining, which you can either put in the same account, or open a new one.

Also note that many providers will allow you to merge the two ISAs into one new account - by simply filling out two transfer forms. (This just makes the admin slightly easier - only one account to look after rather than two).

Mikeyorks

You have a current year ISA and 'previous year' ISAs. The year becomes irrelevant once you've passed the end of each tax year.

Transferring means you're simply moving an ISA from provider A to provider B. It's essentially the same ISA when it gets there as when it started out (but likely different T&Cs) ..... so it has no impact whatsoever on the allowance for the new year. You can open / fund an 09/10 ISA whilst transferring as many previous year ISAs as you have.

tiernanm

Come the New Tax year you can subscribe up to £5,100 of NEW money to a Cash ISA. What you have subscribed in previous tax years is OLD money and retians it's ISA status until you withdraw it.