Can a cash ISA transfer error be reversed?

gterr

Hi there,
I suspect that RBS have made a mistake when carrying out a cash ISA transfer request. I have both a Cash Isa Plus and a cash E-ISA with RBS. I took into my branch a cash ISA transfer form, requesting that £21000 of my Cash Isa Plus be transferred to my new E-ISA in order to benefit from a higher interest rate. I was a bit alarmed when the teller said he would get it sorted that day, and pointed out to him that it was an ISA transfer, not a withdrawal and deposit.

I see from my internet banking that the transfer has gone ahead, in as much as the money has been moved from one account to the other. However, when I look at the Account Summary for the E-ISA this now says "Deposits so far this year are £21000", and "Deposits allowed this year are - (minus) £15240.00" I have not put any new money into these or any other ISAs this year.

So, either the internet banking page is a mistake, or my branch has indeed transferred money from one account to the other, but not as an ISA transfer.

If this error has occurred can the bank simply put it right, or reverse the transaction, or is it more complicated than that? Unfortunately I can't speak to anyone in the RBS ISA department until after the weekend.

MoneySaverLog

Looks like they Royally scewed up. Hope they can sort it.

badger09

gterr wrote: »

Hi there,
I suspect that RBS have made a mistake when carrying out a cash ISA transfer request. I have both a Cash Isa Plus and a cash E-ISA with RBS. I took into my branch a cash ISA transfer form, requesting that £21000 of my Cash Isa Plus be transferred to my new E-ISA in order to benefit from a higher interest rate. I was a bit alarmed when the teller said he would get it sorted that day, and pointed out to him that it was an ISA transfer, not a withdrawal and deposit.

I see from my internet banking that the transfer has gone ahead, in as much as the money has been moved from one account to the other. However, when I look at the Account Summary for the E-ISA this now says "Deposits so far this year are £21000", and "Deposits allowed this year are - (minus) £15240.00" I have not put any new money into these or any other ISAs this year.

So, either the internet banking page is a mistake, or my branch has indeed transferred money from one account to the other, but not as an ISA transfer.

If this error has occurred can the bank simply put it right, or reverse the transaction, or is it more complicated than that? Unfortunately I can't speak to anyone in the RBS ISA department until after the weekend.

Yes they can rectify it
http://www.hmrc.gov.uk/isa/isa-guidance-notes.pdf
11.33b

pqrdef

gterr wrote: »

However, when I look at the Account Summary for the E-ISA this now says "Deposits so far this year are £21000", and "Deposits allowed this year are - (minus) £15240.00"

I'd be more worried if the amount was under the allowance, because then the numbers would be legal, just not what was intended.

As it stands, they can't report that to the taxman, so they have to have some procedure for sorting it. They have ways of dealing with people who try to pay too much new money in.

With banks that promise to pay immediate interest on external ISA transfers, it seems to be fairly normal to credit the money straight away, and then sort out the contribution record later.

gterr

pqrdef wrote: »

I'd be more worried if the amount was under the allowance, because then the numbers would be legal, just not what was intended.

As it stands, they can't report that to the taxman, so they have to have some procedure for sorting it. They have ways of dealing with people who try to pay too much new money in.

With banks that promise to pay immediate interest on external ISA transfers, it seems to be fairly normal to credit the money straight away, and then sort out the contribution record later.

Thanks for this. Perhaps since it was an RBS to RBS transfer some sort of short-cut was used and, as you suggest, the paperwork will be sorted later. I'll enquire on Monday.

I have two further, smaller, transfers in to make, in order to reach the £30k balance where the highest interest rate is applied. I'll wait to see how this present one is dealt with before trying to transfer the others.

At least with RBS - where I live anyway - it's possible to phone and speak to someone in my own branch, rather than a call centre, so that's a blessing.