ISA Transfers

RichCH

It was my understanding that you're only allowed one Cash ISA in a year. But what is the procedure for changing it? Can you literally close one and then go and open another? Or do you have to do a transfer?

I opened one up with First Direct, I used to have one with the halifax. There was a zero balance, but I just had a phone call from First Direct saying the Halifax can't transfer it because there is no balance.

oldfella

if you havent deposited to FD in 12/13, then it doesnt matter, just open a new one

you can open as many as you like, what you cant do is deposit to 2 open ISAs in the same year, if you need to do this then transfer the first one before depositing to the second

psychic_teabag

RichCH wrote: »

It was my understanding that you're only allowed one Cash ISA in a year. But what is the procedure for changing it? Can you literally close one and then go and open another? Or do you have to do a transfer?

You're only allowed to "subscribe" (pay new money) into one ISA in any year. But if you transfer it, it counts as the same ISA, so you can continue to pay into it after it has arrived at its destination.

You mustn't just close one and try to open a new one : the one you closed remains the only one you could pay into, and now it's gone. (well, there is a "self-transfer" "rule", but not really worth going down that road when the transfer process is sufficient.)

If you have already paid into (then withdrawn from) the old ISA this year, perhaps it's simplest to just pay some money back into it and then transfer it.

thenudeone

When did you last put money in to the Halifax ISA?

When did you last take money out of the Halifax ISA, leaving it with a nil balance?

RichCH

I last put any money into the Halifax account in Feb '12. I then withdrew all of the balance on the 10th of April and put that into a savings account. So it's had a nil balance since the 10th of April.

I then opened an ISA with First Direct asking them to transfer my ISA from Halifax, which they won't do because there's no balance in my Halifax ISA. I then deposited my full amount into the first Direct Account last week.

So I haven't put any money into the Halifax account this Tax Year. So I could just close it down?

p00hsticks

RichCH wrote: »

I last put any money into the Halifax account in Feb '12. I then withdrew all of the balance on the 10th of April and put that into a savings account. So it's had a nil balance since the 10th of April.

I then opened an ISA with First Direct asking them to transfer my ISA from Halifax, which they won't do because there's no balance in my Halifax ISA. I then deposited my full amount into the first Direct Account last week.

So I haven't put any money into the Halifax account this Tax Year. So I could just close it down?

Yes you can just close it down - there's no point in transferring a zero balance. What you probably should have done though, unless you needed to spend the money, is to have left the balance in the Halifax Isa to be transferred across to the First Direct ISA rather than placing it in a normal savings account.

Left in an ISA, that money would potentially have carried on earning tax free-interest forever, but by taking it out of the ISA you have now unfortunately lost that opportunitiy.

Vortigern

RichCH wrote: »

So I haven't put any money into the Halifax account this Tax Year. So I could just close it down?

Yes, close it. There's no point in keeping it open. If you're lucky there'll be a small amount of interest added on closure.

RichCH

Reason I pulled it out was because the interest rate dropped to 0.5%, but I just didn't get around to opening a new one. But I have now.

Thank you though... I thought the transfer was that you had to prove you only have one ISA.