ISA Transfer limit

Yorkie1

Mania isn't wrong; the wording was just a little imprecise - the allowance is only relevant for funding a new ISA each year, irrespective of provider.

Mikeyorks

greencode wrote: »

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.

You need them to! It's the cumulative effect of adding interest / adding your new year subscription .... that gives it such a compounding effect over the years.

Your subscription allowance for this year is £5340. That is the only limit you need to worry about. And you can add that to any ISA funds from previous years (contrary to earlier posts - only the current year subscription is relevant. Earlier years are simply lumps of ISA money - they lose their 'years' as soon as you get to the next 6th April) - if you haven't done so already.

Subscription limit for a cash ISA is £5640 wef from April 2012 ..... so you can then add that to your cash ISA 'pot' + accumulated interest.

MoneySaverLog

Yorkie1 wrote: »

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.

I like the analogy, you can however have more than one envelope for the same tax year, one could be empty as you can only fill one of them at a time, and to the max of whatever the ISA limit is. To fill the other envelope you have to transfer what's in the other envelope first from the same tax year.

Looking forward to getting a new envelope on the 6th April with a new limit of £5,640

bryanb

Yorkie1 wrote: »

Mania isn't wrong; the wording was just a little imprecise - the allowance is only relevant for funding a new ISA each year, irrespective of provider.

Also your's is a little imprecise. As I pointed out you can continue to fund the previous years ISA up to the amount allowed, provided the provider allows it. NEW Isa does not enter into it
To make it clearer you can have one ISA and put in the allowance each year. It may not be the best idea from an interest rate point of view.

agrinnall

bryanb wrote: »

Also your's is a little imprecise. As I pointed out you can continue to fund the previous years ISA up to the amount allowed, provided the provider allows it. NEW Isa does not enter into it
To make it clearer you can have one ISA and put in the allowance each year. It may not be the best idea from an interest rate point of view.

I'm not sure your final paragraph does make it clearer. You CAN have one ISA but you MAY have more than one, I currently have two, one that contains transfers in from several previous ISAs and one that contains a transfer in from last year and the funding for this year. I could now transfer one of those to the other one leaving me with just one open ISA, but I choose not to.

xylophone

http://www.hmrc.gov.uk/isa/faqs.htm and http://www.hmrc.gov.uk/isa/rule-change-april08.htm - from the horse's mouth.

bryanb

agrinnall wrote: »

I'm not sure your final paragraph does make it clearer. You CAN have one ISA but you MAY have more than one, I currently have two, one that contains transfers in from several previous ISAs and one that contains a transfer in from last year and the funding for this year. I could now transfer one of those to the other one leaving me with just one open ISA, but I choose not to.

I agree wholeheartedly. What I was correcting was the previous statements that the limit was only relevant to new ISA's.