Santander not letting me transfer to ISA

MoneySavingMouse

Hi,

I opened a Santander ISA and am trying to make it up to £5,100. The last £300 won't transfer in to the ISA online or on the phone, as in February I accidentally transferred £300 to an old ISA instead of a savings account (online), which I immediately transferred back out. They must think I have already transferred £5100 to an ISA this tax year, although the £300 was only in the old ISA for less than five minutes!

Has anyone had this experience? It seems crazy!

Thanks

blueberrypie

As the ISA limit is about how much you can *put in*, you have in fact used up your ISA limit - you've deposited the full £5100. It doesn't matter if you took it back out again, or how quickly - the point is that you deposited that £300 into an ISA, and so it "counts". So on that score, Santander is (for once) correct.

Mind, there's also the issue that you've funded two ISAs in the same year, unless Santander operate the same system as Nationwide where you can have one ISA account operating under several sets of t&c.

MoneySavingMouse

Thanks for your reply. I should probably have closed the old ISA by now, I am a bit confused as to when interest is calculated. I received interest in January but which period would this have covered, the previous April - April?

Thanks

le_loup

You don't have to wait for the interest payment date to close an account. Any accrued interest will be paid on closure. Are you sure you want to close it, or should you think about transferring it?

blueberrypie

MoneySavingMouse wrote: »

Thanks for your reply. I should probably have closed the old ISA by now, I am a bit confused as to when interest is calculated. I received interest in January but which period would this have covered, the previous April - April?

Thanks

As le loup has sais, interest is calculated up to the date of closure and applied then.

But why do you want to close the old ISA? If there are funds in it, why not transfer them to another ISA, one which allows transfers in? By closing the account and withdrawing the funds, you lose the tax exemption on any interest. If you transfer the full amount, the interest will be calculated up to the day of transfer and included with the transfer.

MoneySavingMouse

There isn't anything in it anymore, I received an interest payment in January 2011 but I'm not sure when it was calculated up until, I can't see very far back on my online statements but I am pretty sure there were no funds in it after April 2010, so I'm not sure if I'm due any more interest, or even when that would be paid! The rate would be pitiful now anyway, hence the new ISA!

MoneySavingMouse

So if you transfer funds from an old ISA to a new ISA, do they not count towards the current year's allowance, as they have come from a previous year's ISA? Hope that makes sense! I just transferred the interest payment to my current account.

blueberrypie

There are three ways for money to get into a cash ISA:

a) You put in money - this is called "subscribing".
b) Money is transferred from another ISA, using the ISA transfer procedure.
c) Interest is added.

Only (a) counts towards your ISA allowance. As long as you use the transfer procedure, you can transfer as much and as often as you like - it won't count towards your current year's allowance.

If the balance on the old ISA is zero, it should probably have been closed when it was emptied, and it makes sense to close it now, to avoid the possibility of further accidental transfers. If there is anything left in it, the interest (however tiny the amount) will be paid when you close/transfer.

MoneySavingMouse

Many thanks, this is just the information I was looking for. Off to close my old ISA now, and only transfer in future! It doesn't seem possible to close the ISA online, I imagine it's a branch visit?