Transfer of old cash ISA

LisaLJ

Apologies if this has been answered somewhere else but I haven't tracked down the answer yet.

I am thinking of transferring last years cash ISA to a new provider that also requires me to deposit at least £1, which means I have opened a new cash ISA for this year....no problem with that.

What I want to know is can I then transfer some of the cash from this new current years ISA to a stocks and shares ISA? I ask because the money to be transferred to a stocks and shares ISA would be last years even though its held in this years ISA.

I know you cant split the current years cash ISA between cash and stocks but I'm confused as to if old money transferred in to a current cash ISA counts as this years money too?

Hope that can be followed!

I realise that I could transfer part of the old cash ISA to a new cash ISA and some to a stock and shares ISA but I was hoping to move it all now to give me more time to finalise my investment strategy.

innovate

LisaLJ wrote: »

I know you cant split the current years cash ISA between cash and stocks but I'm confused as to if old money transferred in to a current cash ISA counts as this years money too?

Hope that can be followed!

Terribly sorry but I for one cannot follow you. You are wrong, you CAN split current year's ISA between cash and S&S. Transfers in do not count towards your current year's allowance.

Perhaps Google ISA HMRC FAQ, that should show you a list of commonly asked questions together with answers from the horse's mouth.

LisaLJ

innovate wrote: »

Terribly sorry but I for one cannot follow you. You are wrong, you CAN split current year's ISA between cash and S&S. Transfers in do not count towards your current year's allowance.

Perhaps Google ISA HMRC FAQ, that should show you a list of commonly asked questions together with answers from the horse's mouth.

It says in the Isa guide on this website that

"Current year's cash ISA. You can move ALL of
this to another cash ISA, or into a stocks &
shares ISA. You can't split it into more than one
provider or ISA type."

As I will have opened a new cash isa for this year then I assume the above is correct and that I can't them move half of the money I transferred in to a stocks & shares isa even though all but £1 is from a transfer of a previous years isa?

innovate

LisaLJ wrote: »

As I will have opened a new cash isa for this year then I assume the above is correct and that I can't them move half of the money I transferred in to a stocks & shares isa even though all but £1 is from a transfer of a previous years isa?

You do not need to make any deposit if you are requesting a transfer, and you do not need to make a deposit to open an ISA.

Rather than discussing the rules in theory, what exactly is it you are wanting to do?

LisaLJ

innovate wrote: »

Rather than discussing the rules in theory, what exactly is it you are wanting to do?

Thanks for trying to follow my question! I'll try to explain again using an example: -

In last years cash ISA (2013/14) there is £10k. This will need transferring to another cash ISA (2014/15) to get a better interest rate because the bonus has gone on the 2013/14 one.

I will also be depositing new money in to this 2014/15 cash ISA.

At some point I would like to split up the £10k between a new cash ISA for this year and a S&S ISA for this current year.

I know I can transfer the £10k while its still held in the 2013/14 cash ISA into separate cash and S&S ISA's (£5k in each) for this year.

But am I allowed to do that split if I have transferred the £10k as a whole amount to a new cash ISA for 2014/15?

I don't think I can because it will now be in a current years cash ISA even though the money I wish to split came from last years cash ISA.

Thanks for your patience and apologies if it's still confusing.

ETA: I will probably be unable to reply further for a few days due to family matters but would still be grateful for you or anyone else who can hopefully answer my confusing query!

innovate

LisaLJ wrote: »

But am I allowed to do that split if I have transferred the £10k as a whole amount to a new cash ISA for 2014/15?

I don't think I can because it will now be in a current years cash ISA even though the money I wish to split came from last years cash isa

The only thing you have to watch is the amount(s) of NEW money you deposited in the current year. If you want to transfer any of that money, you must transfer all of that money.

Any money from previous years can be split whichever way you like and as often as you like, even if this money sits in an ISA into which you deposited this year.

Example: you transferred the £10K in your old ISA, then deposited £5,940 now and £9,060 in July into the same cash ISA. In August, you want to transfer £5K into a S&S ISA. This is perfectly ok since you can fund the transfer from old money. If, however, you wanted to transfer £11,000, you could NOT do that since new money would be needed for this transfer, and you would need to transfer the full £15,000 of the new money.

This is all still VERY theoretical, for various reasons. Since the rates for cash ISAs allowing transfers in are generally even worse than the best cash ISAs, it would not be a clever move to put new money into an ISA that has transferred money in it. More importantly though, there is literally no reason at all to deposit any money into a new cash ISA any time before late March 2015, since you will be able to get a lot better interest outside cash ISAs. So you might as well keep your new money in high interest paying accounts until you are ready to make your S&S investments, or until next March.

LisaLJ

Thanks! You are a genius! That has answered my dilemma perfectly! :j

I agree with your last paragraph about better rates elsewhere and I already have most of the current accounts that are available to me full already with savings.

I wish I could have found an answer online like yours that explains it so clearly. Very many thanks again for all your time and trouble.