ISA Confusion

girllikeme1

I have some money (about £2500) in an Alliance & Leicester ISA, now Santander. If I transfer it into a new ISA on 6th April will this be included as part of the year's ISA allowance or not? Can I then add another £5K next tax year? Can I open the ISA before 6 April and initiate the transfer, or not? Sorry, really confused and not sure which way is best!

I am thinking about Halifax 3% transfer-in ISA.

Thanks...

spikyone

Hey girllikeme1,

This is such a common question, I have no idea why providers/the government don't make ISAs easier to understand.

Basically, transferring your money does not count as opening an ISA. You can transfer at any time, to an ISA that you already have or an ISA that you take out specifically for the transfer (as long as the ISA allows it, which of course the Halifax one does )
If you're transferring this tax year's allowance (2010/11), you must transfer all of it, in one go. Previous years' allowances can be transferred partially.
If you do transfer before April 5th, you will still be able to add another £2600 to the ISA you have transferred into before this tax year ends (to take yourself up to the current £5100 allowance). In the next tax year (2011/12, from April 6th), you're effectively back to zero, so can invest up to £5340 either in that ISA, or a new ISA.

Hope that's useful?!

Lokolo_2

girllikeme1 wrote: »

I have some money (about £2500) in an Alliance & Leicester ISA, now Santander. If I transfer it into a new ISA on 6th April will this be included as part of the year's ISA allowance or not? Can I then add another £5K next tax year? Can I open the ISA before 6 April and initiate the transfer, or not? Sorry, really confused and not sure which way is best!

I am thinking about Halifax 3% transfer-in ISA.

Thanks...

You can transfer your Santander ISA whenever and wherever you like, ISA transfers do NOT count towards your annual ISA limit, however you must fill in transfer forms and not attempt to transfer the ISA yourself! Well done for finding the Halifax ISA, it seems to be the top paying ISA accepting transfers in :j

Yes, next tax year (from April 6th) you can add up to £5340 into a Cash ISA.