ISA Transfer limit

greencode

In 2009-2010 I had an ISA with Barclays for the full £5100 - In 2010 I transferred this to Halifax but what happened was they transferred the original £5100 plus the interest I gained in that year so in total £5265.94 was transferred. As the limit for 2010-11 is £5340 does that mean I can therefore top that amount up to the full £5340?

I also opened a new ISA with Santander to the full £5340 so I have two ISA's now - one that was a transfer and one new.

Also, does this then mean next year that I can open another ISA i.e. transfer the two current ones to two different banks and open a new one. If so do I continue to do this each year?

Linton

greencode wrote: »

In 2009-2010 I had an ISA with Barclays for the full £5100 - In 2010 I transferred this to Halifax but what happened was they transferred the original £5100 plus the interest I gained in that year so in total £5265.94 was transferred. As the limit for 2010-11 is £5340 does that mean I can therefore top that amount up to the full £5340?

I also opened a new ISA with Santander to the full £5340 so I have two ISA's now - one that was a transfer and one new.

Also, does this then mean next year that I can open another ISA i.e. transfer the two current ones to two different banks and open a new one. If so do I continue to do this each year?

You cannot top-up ISAs from previous years.
You can transfer an ISA from one supplier to another at any time. The transferred ISA retains the year from when it was originally opened.
You can open a new ISA anywhere each year.

Peonie

You don't have to open a new cash ISA each year, but can move an old one to a new bank (if they have a better rate) and can continue to credit that account. You cannot credit two separate cash ISAs in the same financial year.

greencode

Peonie wrote: »

You don't have to open a new cash ISA each year, but can move an old one to a new bank (if they have a better rate) and can continue to credit that account. You cannot credit two separate cash ISAs in the same financial year.

Forgive me for my ignorance here! So what you're saying is that I can only have 1 ISA open at any time? So I can only have £5340 in a cash ISA at any one time?

I thought each year you could open a new ISA and therefore keep accruing the interest on each ISA each year i.e. after 5 years I may have 5 ISA's but only pay into the new one I opened?

BLB53

You can only open/fund 1 new cash isa per year. You can open a new cash isa with different providers each year. If you miss paying in to your isa any year, you lose your entitlement for that year. You can pay money into an isa opened in previous years but can only pay into any one isa in any one year, whether it is a new one or previously opened one.
All old isas can be transferred to a new provider including all interest.
Cash isas can also be transferred into a S&S isa (but cannot then be transferred back to a cash isa)

Yorkie1

I like to think of ISAs as money in envelopes - one for each tax year. When you invest new money (NB this does not include interest) in a tax year, it goes into an envelope with that tax year written on it. Initially, bank (or B Soc) A holds the envelope. But you can transfer the envelope to bank B and then to C whenever you like. If you then invest some more money in the following tax year, that's a brand new ISA / envelope, irrespective of the bank holding it.

At one point I had about 4 ISAs from different tax years, all with different providers. I've now brought them together so they are all held by the same B Soc for ease of reference in a single account, but I could split them again if I chose.

What you can't do is have more than one ISA / envelope per tax year, so you can't put new money into bank A and bank B in the same tax year unless you have transferred the envelope from A to B before depositing in B.

greencode

When I transfer an ISA from a previous year what do I do about the interest accrued? What happened when I transferred it for the first time this year was they transferred everything, including the interest.

p00hsticks

Any interest accrued doesn't count towards your annual allowance - it's only what YOU put in.

mania112

The easiest way to look at it:

ISA Transfers have no limit.

The ISA allowance is only relevant for starting a brand new ISA.

- also if you transfer your ISA, you'll keep any interest you've gained.

thenudeone

Yorkie1 wrote: »

I like to think of ISAs as money in envelopes - one for each tax year.

If you transfer during the current tax year, the envelope has to be transferred in full, but you can keep filling it up to the annual limit at the new provider.

Once the tax year has ended, you can split and transfer the balance in the envelope to several different ISA providers if you want (for example - half locked away to get a better rate, and half with instant access for emergencies) but you can't put any more in.

There is limit on ISA BALANCES, just a limit on what you put in each year. It is possible to have over £70k in cash ISAs, if you have used the allowances every year.

bryanb

mania112 wrote: »

The ISA allowance is only relevant for starting a brand new ISA.

Not really, you can only contribute to one ISA up to the limit each year, that ISA could be the same one as you contributed to last year.