ISA confusion - can someone please unpick?!

MoneySaverLog

You've got it right, what's invested this year, next year will be classed as old money. So you get a new allowance each tax year. You can then transfer in previous year ISA's into a new one as the rates drop at anytime, as long as you're not tied into a fixed rate. Even then you can as long as you're prepared to accept any penalties.

I think the key is to use up your ISA allowance, or as much as possible, before the end of the tax year to maximise what you can put in next tax year.

Mikeyorks

MoneySaverLog wrote: »

But if you draw £5,000 out in this tax year, rather than do a transfer using the new providers form, you'll only be able to put £340 in before the 6th April.

If the original post is accurate - that is not the case. The OP clearly states the £5k was contributed at the end of 10-11. And then infers they have not used, nor do they intend to, any of the 11-12 allowance.

Which they can then use to redeposit the £5k + interest if they decide to close the £5k ISA and redeposit as 'cash'. They lose absolutely nothing, over and above a transfer, if they don't intend to put new money into ISAs during 11-12. Which they clearly state as being the case.

I dont have the money to open another (in addition ISA)

Mikeyorks

wrenlegs wrote: »

Im right in thinking that if I transfer this years its classed as 'old money' (if Ive got it right ) so I can save the maximaum amount next year NOT counting the money I saved this year.

If your earlier posts are accurate - you don't have a 'this years' ISA? As you contributed the £5k at the end of 10-11? So it is already 'old money' ....... despite the fact the bonus has not yet matured.

Therefore your 11-12 allowance is totally unused? Which you can utilise to re-deposit the £5k + interest if you decide to go the DIY rather than transfer route. But you must redeposit before 6th april otherwise you will then be using most of your 12-13 allowance. Having totally lost your 11-12 allowance.

I wrote post #4 very carefully. Perhaps reread it? As it was constructed around your apparent concern to have a choice of some ISAs that don't allow transfers in.

wrenlegs

I see. YEs, you are rigt. If I opened the ISA in March 2011 (technically 09-10 tax year, then I havent used 2010-11 'this'years allowance. So, I could move my money staright away into an ISA for this current financial year and as I have no new money to invest for the next financial year I have nothing to lose by withdrawing instead of transferring. Phew. Got there finally Thank you to everyone who took the time to reply. All the resplies have helped me be a bit clearer about how it all works.

Mikeyorks wrote: »

If your earlier posts are accurate - you don't have a 'this years' ISA? As you contributed the £5k at the end of 10-11? So it is already 'old money' ....... despite the fact the bonus has not yet matured.

Therefore your 11-12 allowance is totally unused? Which you can utilise to re-deposit the £5k + interest if you decide to go the DIY rather than transfer route. But you must redeposit before 6th april otherwise you will then be using most of your 12-13 allowance. Having totally lost your 11-12 allowance.

I wrote post #4 very carefully. Perhaps reread it? As it was constructed around your apparent concern to have a choice of some ISAs that don't allow transfers in.

Mikeyorks

wrenlegs wrote: »

If I opened the ISA in March 2011 (technically 09-10 tax year, then I havent used 2010-11 'this'years allowance.

You actually opened it in 10-11. So it is this years allowance (11-12) you haven't used.

But that does - with no new money to invest - allow you to choose any of the ISAs on offer. If you simply close the £5k ISA and simply re-invest the cash. That way you can choose a new ISA that wouldn't accept transfers in.

It's not normally a beneficial way of doing it - but it suits your circumstances.