Question about transferring ISA's

[Deleted User]

Just coming to the end of the year with Santander and I'm confused about transferring ISAs (Current going from 3.5% to 0.5% soon, new is at 3%)

I've got less than £1000 currently and will not be able to invest more than £1000 this year.

So, having read not to just withdraw money from one ISA and pay it into another I assume this is only to ensure you keep the tax free maximum.

As I have nowhere near this and the new Santander ISA does not allow transfer in, I hope that I can just withdraw the whole lot and close the current ISA and just open a new one?

Soliton

If you are confident that the combined total does not exceed the ISA limit for the year you are investing (and circumstances will not change during the year), then it may be benificial. The reason for this is that you are likely to find a better rate for a "new money" ISA than for a transfer.

Warning: If you have paid money into the current ISA this year (2010/11) you cannot open the new ISA and pay money into in 2010/11 as well, you would have to wait for the next tax year (2011/12).

[Deleted User]

Soliton wrote: »

If you are confident that the combined total does not exceed the ISA limit for the year you are investing (and circumstances will not change during the year), then it may be benificial. The reason for this is that you are likely to find a better rate for a "new money" ISA than for a transfer.

Warning: If you have paid money into the current ISA this year (2010/11) you cannot open the new ISA and pay money into in 2010/11 as well, you would have to wait for the next tax year (2011/12).

Does that mean I can only have one ISA per year?

So I'll just have to wait until April 6th to open the new one, and then do the same every year?

lisyloo

Does that mean I can only have one ISA per year?

You can only have ONE active ISA that you are contributing to at any one time.
You can have as many old ones as you like.

So I'll just have to wait until April 6th to open the new one, and then do the same every year?

You can transfer at any time.
You are right that transferring enables you to keep the old allowance.
If you don't need the old allowance (you are certain you won't exceed the current years allowance), then withdrawal and deposit is better as it will be quicker.

emeraldbugle

I've got the same ISA as you, the introductory rate ends 24/02/11 for me.

I'm transferring it to Halifax.

For ease you could ask them to transfer it to Santander's Direct ISA.

Another question? How much have you contributed this year? Could you withdraw the £1000 and subscribe again for this year?

Am sure someone will know the answer.

Lokolo_2

emeraldbugle wrote: »

Another question? How much have you contributed this year? Could you withdraw the £1000 and subscribe again for this year?

Am sure someone will know the answer.

If you withdraw any money from your ISA, that is lost, you cannot then deposit it again towards this years allowance, you can only deposit the allowance that you have left (ISA Allowance minus what you've deposited already this tax year)

[Deleted User]

So I could I withdraw the total amount, (say £1000), close the current instant access ISA then open up a new instant access ISA and deposit the £1000 without waiting until April 6th?

Santander state you cannot transfer money in to the one I'm looking at.

Lokolo_2

[quote=[Deleted User];41281398]So I could I withdraw the total amount, (say £1000), close the current instant access ISA then open up a new instant access ISA and deposit the £1000 without waiting until April 6th?

Santander state you cannot transfer money in to the one I'm looking at.[/QUOTE]

This may not work if you are opening the new ISA with another provider, as per the ISA regulations you are only allowed to subscribe to 1 ISA provider during the tax year, but this doesn't stop you transfering from the current ISA to the new ISA provider, why would you not want to transfer? :j

[Deleted User]

aaronmanz wrote: »

This may not work if you are opening the new ISA with another provider, as per the ISA regulations you are only allowed to subscribe to 1 ISA provider during the tax year, but this doesn't stop you transfering from the current ISA to the new ISA provider, why would you not want to transfer? :j

Because Santander says I can't.

"You can open your cash ISA with as little as £1 and save up to £5,100.

No cash ISA transfers in allowed.

All payments you make into your ISA count towards your ISA allowance.

If you use up your allowance and then take money out of your ISA, you cannot pay that money back in until the start of a new tax year."

Lokolo_2

[quote=[Deleted User];41282586]Because Santander says I can't.

"You can open your cash ISA with as little as £1 and save up to £5,100.

No cash ISA transfers in allowed.

All payments you make into your ISA count towards your ISA allowance.

If you use up your allowance and then take money out of your ISA, you cannot pay that money back in until the start of a new tax year."[/QUOTE]

I see,

This will not work then, you must find a provider who accepts transfers in and then transfer to them.

Otherwise what you can do is withdraw, but wait until the new tax year when you can open a new ISA and contribute to it.

Draig_Goch

Don't withdraw the money and then go to a new bank / building society to pay it in. Go to them first and ask for an External ISA Transfer Form (or whatever their name for it may be). This should enable you to transfer the funds to the new account without losing your allowance for that year.