ISA Transfer

Paul_Varjak

I already have a Halifax Direct ISA which I intend to add to on April 6th.

But First Direct are paying 6.25% until October, 2005. Can I then open a First Direct ISA and transfer the entire amount of the Halifax ISA (except for £1) to the First Direct ISA?

The problem as I see it is: Will the £1 left in the Halifax account be seen as being from the 2004-2005 tax year or the 2005-2006 tax year?

On October 6th, I would then transfer the Money back to the Halifax ISA.

What are the actual procedures for doing the transfers, given that both are Internet-only accounts. I assume I cannot just do the transfer online but would have to follow some proper procedure. But what is the proper procedure for Internet-only based ISAs?

Daft_Monkey

When transfering ISAs you can either transfer the entire amount or the subscription of the current year.
In FDs case I think if you open the ISA prior to April 6, you can transfer only the current year's (2004/2005) subscription (including interest I think) and not the entire amount. You can then top it up after April the 5th. If you open the ISA after April the 5th you will only be able to transfer the 2005/2006 subscription (someone correct me if I'm wrong).
You will have to contact FD to send you an application form containing the necessary transfer entries. You should check the Halifax term and conditions just to make sure there are no transfer penalties. Filling in the application (including the transfer fields) FD will send you should in itself be enough, however, different providers adopt different policies, so you might want to check with Halifax first before going ahead.

P.S Being so close to the end of the financial year, I'm not sure whether you will have enough time to go throught the process of transfering your ISA subscription to the new provider as it can take up to 30 days.

grumbler

Paul_Varjak wrote:

The problem as I see it is: Will the £1 left in the Halifax account be seen as being from the 2004-2005 tax year or the 2005-2006 tax year?

As far as I understand from Cash ISA Discussion/Question and ISA Transfer FAQ on this board, you can transfer full current year subscription and/or full or part of previous years subscriptions. Hence, you can leave £1 as part of 04/05 subscription.
Am I wrong? :mad:
I am not sure that FD will allow transferring the entire amount you want as they have some unintelligible restrictions widely discussed here.

Daft_Monkey

Yep, I stand corrected, it's the full subscription for the current year, and/or full or part of previous subscriptions. I should read the threads more carefully...

Now according to the FD web site:
The mini cash e-ISA is currently only available to first direct customers for the 2004/5 tax year.
You will be able to apply for the 2005/6 tax year from 6 April 2005.

I guess this is probably due to not enough time left to process new applications before the end of the financial year, as few weeks ago there were no such restrictions.

Paul_Varjak

Daft_Monkey wrote:

Yep, I stand corrected, it's the full subscription for the current year, and/or full or part of previous subscriptions. I should read the threads more carefully...

That is why I am asking whether the £1 I leave in ther Halifax account will be regarded as from 2004-2005 or 2005-2006!

Daft_Monkey wrote:

Now according to the FD web site:
The mini cash e-ISA is currently only available to first direct customers for the 2004/5 tax year.
You will be able to apply for the 2005/6 tax year from 6 April 2005.

I have used up my ISA allowance for 2004-2005 and cannot open another until 2005-2006. But I want to make sure I make best use of my 2005-2006 allowance. I can do this by simply transferring money into existing ISA (on April 6th) and then open FD ISA ASAP from April 6th onwards and transfer funds to that from existing ISA.

Daft_Monkey wrote:

I guess this is probably due to not enough time left to process new applications before the end of the financial year, as few weeks ago there were no such restrictions.

That is what I suspect also. If you are an existing FD customer they already know who are you are!

isasmurf

Paul_Varjak wrote:

That is why I am asking whether the £1 I leave in ther Halifax account will be regarded as from 2004-2005 or 2005-2006!

I'm not sure what you're getting at here. The £1 left in the Halifax account will be regarded as being from whatever year you put that £1 in to the account. If you don't put the £1 into the Halifax account during 2005-06 then it won't be regarded as being from 2005-06.

Paul_Varjak

isasmurf wrote:

I'm not sure what you're getting at here. The £1 left in the Halifax account will be regarded as being from whatever year you put that £1 in to the account. If you don't put the £1 into the Halifax account during 2005-06 then it won't be regarded as being from 2005-06.

Paul_Varjak wrote:

I already have a Halifax Direct ISA which I intend to add to on April 6th.

As my original post said I already have an ISA with Halifax and I intend to add to it on April 6th. Which means the ISA will have contributions from 2004-2005 and 2005-2006 tax years.

So, when I transfer all but £1 (to keep Halifax ISA open) to First Direct will that £1 left in the Halifax account be regarded as from the 2004-2005 tax year or the 2005-2006 tax year?

Milarky

Paul_Varjak wrote:

As my original post said I already have an ISA with Halifax and I intend to add to it on April 6th. Which means the ISA will have contributions from 2004-2005 and 2005-2006 tax years.

So, when I transfer all but £1 (to keep Halifax ISA open) to First Direct will that £1 left in the Halifax account be regarded as from the 2004-2005 tax year or the 2005-2006 tax year?

Ordinarily I would say the £1 will be regarded as coming from 2004-05 because the requirements on transfers are that you must transfer the whole of a current year or not at all, but can split down previous years anyway you like.

However if I have got my FD terms correct they only allow you to transfer the up to the amount of a current year's subscription [someone correct if I'm wrong please] plus any interest if added. That's up to £3,000 + interest.

If you add to your Halifax Direct after 6th April, therefore, you would only be able to transfer that £3,000 into the FD ISA - not earlier amounts.

I have transferred £3,000 into FD before April 5th [all that they allow] in this way and can then add a further £3,000 directly after April 6th but that is the limit as far as I can see.

BTW, if you already had interest added to the non FD ISA from which you wished to transfer and there were several year's worth of subs there the interest payment would not be split down into '2004-05' and 'pre 2004-05' amounts would it? [Maybe FD gets the ISA provider to confirm the interest in respect of of one year only before withdrawing that amount]

Paul_Varjak

Didn't realise that FD may only allow transfer of existing year's ISA subscription. I will have to look closely at T&Cs on April 6th.

Daft_Monkey

Yeap, Milarky sounds right.
As far as I remember there was no mention in their T&Cs about transfers, apart from transfering out (someone correct me if I'm wrong).
The only mention of transfering amounts from the old provider was in the page after pressing the apply button, and was refering to 2004/2005. i.e transfering your current ISA subscription and interest to FD (they wouldn't allow anything from previous years). In theory you should be able to transfer your 2005/2006 subscription to them. To be on the safe side give them a call and ask them what you will be able to transfer for the 2005/2006 subscription.

If they only made it simpler...