Transferring to NS&I ISA

joebloggs69

Just want to make sure this is 100% OK and legal - the NS&I ISA for some stupid reason doesn't let you transfer in, only DD. So can I safely transfer money from my HSBC ISA (Just over £3000 from the 05/06 year) to my HSBC current account then debit it over to the NS&I ISA when I open it? What I really want to check is if I am allowed to have both ISA's open at the same time.

Any advice appreciated,

Joe.

masonic

There's no problem in doing that. You've not, thus far, opened an account this tax year, and you are free to have as many ISAs relating to previous years as you like. If you can't afford to put a fresh £3000 in, you can do as you suggest. Alternatively, you could transfer your 2005/6 ISA to another provider AND open the NS&I one with new funds.

Ian_W

Have you put any money in an 06/07 cash ISA? If not then you could do that but you can only £3K in, not the "little over" and as soon as you move it out of the 05/06 ISA to your current account it loses it's tax free status. It will however become tax free again in the NS&I one as soon as you deposit it.
Ideally you should put new money into the 06/07 ISA - if you have it available - and keep your 05/06 money tax free. If you're not happy with with HSBCs rates you can transfer it to another provider.

EDIT to add - Snap!

joebloggs69

Thanks for the reply guys, unfortunately I currently don't have any more money but will hopefully be adding about £100 per month during the next tax year. The 'little over' is just the hundred and something pounds interest I've collected since opening the HSBC account, so I may well do as I suggested above, put the £3000 in this month, and the rest plus the £100 a month in after April 5th.

Thanks again!


PS. Have you any idea how the tax will work once I put the £3000 in my current account? I mean will I only be taxed if it's in there at the end of the month or will I get hit straigt away?

LittleVoice

joebloggs69 wrote: »

A) Thanks for the reply guys, unfortunately I currently don't have any more money but will hopefully be adding about £100 per month during the next tax year. The 'little over' is just the hundred and something pounds interest I've collected since opening the HSBC account, so I may well do as I suggested above, put the £3000 in this month, and the rest plus the £100 a month in after April 5th.

Thanks again!


PS. Have you any idea how the tax will work once I put the £3000 in my current account? I mean will I only be taxed if it's in there at the end of the month or will I get hit straigt away?

I'm not clear about the exchanges above so:

A) Can we just check that none of the money (other than any interest) you have in your current ISA was put in after 5 April 2006. If you added any money to that ISA account (or an ISA anywhere else) on or after 6 April 2006, you can't open the NS&I ISA before 6 April 2007.******

Do you earn interest on positive balances in your current account? If you don't, then there are no tax implications for you while it is there. If you do, you would pay tax at 20% on the interest earned on the £3000 while it is in the current account whenever you receive interest. [Edit: masonic - Snap! (to the minute)]

***** Edit: Sorry, I think that was established in earlier exchanges!!!!!

masonic

joebloggs69 wrote: »

PS. Have you any idea how the tax will work once I put the £3000 in my current account? I mean will I only be taxed if it's in there at the end of the month or will I get hit straigt away?

You'll only pay tax on any interest you earn while the £3000 is in your current account, which will probably amount to almost nothing, if not indeed nothing.

Edit: Hmmm, we seem to all be falling over ourselves to give you identical advice. :rotfl:

ManAtHome

As it's 1-1 on the "posting at the same time" contest, don't let your antelope near the broccoli...

If you just want to transfer, Kent Reliance is 5.7% and allows transfers in (will "cost" you £3 a year compared to NS&I, but you'll probably lose that in the time it takes to transfer, plus interest on any interest from 05/06 if you take the close/reopen route).