Year in hand.

rg1973

Hi, first time poster (please be gentle).

As per the header I have not made any transactions to my Golden ISA in this tax year and have just received a statement. My question is can I close this ISA now and subsequently open and invest a new Golden ISA 2 in the next tax year without incurring any penalty, or would a transfer to another provider be the better idea?

Thanks for any advice.

JamesU

rg1973 wrote: »

Hi, first time poster (please be gentle).

As per the header I have not made any transactions to my Golden ISA in this tax year and have just received a statement. My question is can I close this ISA now and subsequently open and invest a new Golden ISA 2 in the next tax year without incurring any penalty, or would a transfer to another provider be the better idea?

Thanks for any advice.

Welcome! If you look around the threads on Cash ISAs I think there are a few threads where it is suggested that Barclays will not allow you to transfer your existing ISA to a new ISA with them. Check the terms and conditions of the new cash ISA first to find out. I stopped dealing with Barclays ISAs a few years ago for this very reason when they were playing the same tricks with their "tax haven ISas." So much for customer loyalty. If they are still up to this, nothing much has changed. But with your exisiting Barclays cash ISA, do not close it down or you will loose the tax wrapper. If they do not allow you to transfer your exisiting ISA to the new ISA with them, transfer it to another provider that has an interest rate you are happy with.

JamesU

Sanzai

Not generally advised to close an ISA account, as that will cause the associated money to lose its tax-free status. If you are not happy with the interest rate you are getting at the moment, the best option is an ISA account which will allow transfers in (the Golden ISA 2 does not). You then apply to the new provider for a transfer form and they will handle the actual process, allowing your money to remain within the ISA wrapper.

You should, as you are thinking, make use of this year's ISA allowance too if you can afford to do so. Many people have looked into the Santander/A&L Flexible ISA with its annual interest rate of 3.5%. If you are interested, have a look in the relevant thread for information on the number you need to call to set that up.

JamesU

Sanzai wrote: »

Not generally advised to close an ISA account, as that will cause the associated money to lose its tax-free status. If you are not happy with the interest rate you are getting at the moment, the best option is an ISA account which will allow transfers in (the Golden ISA 2 does not). You then apply to the new provider for a transfer form and they will handle the actual process, allowing your money to remain within the ISA wrapper.

You should, as you are thinking, make use of this year's ISA allowance too if you can afford to do so. Many people have looked into the Santander/A&L Flexible ISA with its annual interest rate of 3.5%. If you are interested, have a look in the relevant thread for information on the number you need to call to set that up.

Yes as above from Sanzai. And there is an excellent thread by Kazza242, regularly updated, to work out the best cash ISA options from most providers in the link below. Do take a look.

http://forums.moneysavingexpert.com/showthread.html?t=401374

JamesU

rg1973

Many thanks for the replies.

I ought to clarify what I meant, sorry.

It is/was my intent to close the existing ISA in the current tax year and transfer the subsequent amount into a Golden ISA 2 opened in the next tax year (although reading the posted threads has shown there are competitive transferable ISAs available from other providers - thanks again). I should have pointed out I only have limited funds to invest.

If I were to do so wouldn't the money be outside the ISA wrapper (and loss of allowance) for - only - the remaining 9 days of this year before being invested in the new ISA opening in the next tax year, or am I missing something fundamental?

Once again, thanks for any insight.

JamesU

Sanzai wrote: »

Not generally advised to close an ISA account, as that will cause the associated money to lose its tax-free status. If you are not happy with the interest rate you are getting at the moment, the best option is an ISA account which will allow transfers in (the Golden ISA 2 does not). You then apply to the new provider for a transfer form and they will handle the actual process, allowing your money to remain within the ISA wrapper.

You should, as you are thinking, make use of this year's ISA allowance too if you can afford to do so. Many people have looked into the Santander/A&L Flexible ISA with its annual interest rate of 3.5%. If you are interested, have a look in the relevant thread for information on the number you need to call to set that up.

Yes you are missing something fundamental, you are not reading the correct advice you have been given! Read what Sanzai has said in his quote above.

On what date does your existing Barclays cash ISA expire? 12 mths? Date opened? Keep it until this date so that there are no penalties for transferring it. As I mentioned previously do not close this Barclays isa or it will loose its tax free status. Then you can go to any provider you like that offers a better interest rate, period tied in etc (links given to you above Kazza242), fill in a transfer form with the new provider, and they will take the ISA from Barclays and you will hold the ISA with the new provider instead.

I hope this is a bit clearer now?

JamesU

anamenottaken

rg1973 wrote: »

Many thanks for the replies.

I ought to clarify was I meant, sorry.

It is/was my intent to close the existing ISA in the current tax year and transfer the subsequent amount into a Golden ISA 2 opened in the next tax year (although reading the posted threads has shown there are competitive transferable ISAs available from other providers - thanks again). I should have pointed out I only have limited funds to invest.

If I were to do so wouldn't the money be outside the ISA wrapper (and loss of allowance) for - only - the remaining 9 days of this year before being invested in the new ISA opening in the next tax year, or am I missing something fundamental?

Once again, thanks for any insight.

If you have less than £5100 (including interest accrued) in your current ISA AND won't be wanting to put a total of more than £5100 in an ISA in 2010-11, then withdrawing the funds from your current ISA (as long as there isn't an interest penalty for doing so) and walking down the road to another provider would be OK in terms of tax savings.

Sanzai

anamenottaken wrote: »

If you have less than £5100 (including interest accrued) in your current ISA AND won't be wanting to put a total of more than £5100 in an ISA in 2010-11, then withdrawing the funds from your current ISA (as long as there isn't an interest penalty for doing so) and walking down the road to another provider would be OK in terms of tax savings.

This is certainly true. However, for the most flexibility (including the possibility that you might have more money to spare in the next tax year than you expect at the moment) the advice I and JamesU are giving will optimise your options for the 2010/11 tax year.

rg1973

Ah, fantastic. That was what I was looking for. Thanks to you all.