ISA Manager Error - Cash to S&S ISA Transfer

datostar

I recently applied to my S&S ISA Manager, M&G Investments, to transfer £4000 from an Instant Access Cash ISA with Santander, and correctly completed their Transfer Form, indicating that I wished to make a partial transfer of £4000 of previous years' subscriptions in the Santander ISA.
Obviously the form was sent to Santander because shortly afterwards I received a letter from them advising me that a sum of over £29,000 had been transferred to M&G, the entire content of the ISA, including the current year subscription of £5760. They have closed the account.
I immediately rang M&G who confirmed that they were expecting £4000 as specified by me and as per the transfer form and after discussion agreed not to pay in the Santander cheque (which they had not received at that time).
My initial contact with Santander was unhelpful. I was told that they only transfer what they are requested to and that it must be the fault of the other party. After several 'secure messages' to Santander I was provided with a contact number for their ISA Team. A lengthy conversation did not result in resolution of the matter which has now been sent to the 'Back Office' for investigation.
I suspect that someone at Santander has either misinterpreted the Transfer Form (which also caters for S&S Transfers involving the sale of stocks or transfers in specie) or not read the entire 3 pages of it.
Does anyone know what the legal position is here? I fear that as far as HMRC are concerned the transfer may in law have taken place and that moving the funds back (before 1st July) might count as an impermissible S&S to Cash transfer.

Archi_Bald

You should ask M&G to resolve the issue for you. Raise a written complaint with them. Even if the error was made at Santander, it shouldn't be down to you to chase the repair. And you should definitely not be left out of pocket for a mistake you are not responsible for.

Check clause 10.31c here: http://www.hmrc.gov.uk/isa/isa-guidance-notes.pdf

It clearly says they can re-instate where an error was made despite clear instructions. Hope you kept a copy of your instructions.

datostar

Thanks for that - useful ammunition there!