A TOISA does not have any time limits placed on it (unless the provider has placed some on it)
You can place the capital from a TESSA into a TESSA only ISA (TOISA) or a Mini Cash ISA or the cash component of a Maxi ISA - the point is you don't have to stick it into a TOISA if you can find a better deal elsewhere.
Once in an ISA it will then be treated like any other cash ISA, i.e. you can transfer it between providers if you so wish, it will no longer be recognised as money coming from a TESSA. So as long as ISAs are tax free (which at the moment is only guaranteed to be until April 2009) the income from the money you invest from your TESSA will remain tax free.
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