Transferring in ISAs

wheelz

I've read the isa guide on MSE but just not sure yet. Can I transfer ISAs (one or multiple) into a new one (provided they allow it) without it affecting the maximum ISA allowance per year? Or does it count towards your new allowance (£15,400).

And can I open the 'transfer in ISAs' with a different provider to the 'new money' ISA (still to be opened for this year).

eskbanker

Yes, no, yes, in that order!

wheelz

I'm confused now as I've found this on a bank's website: Using the ISA Transfer Service means that the interest you earn on your money will remain tax-free and previous year’s savings you transfer won’t count towards your current annual allowance.

So it doesn't affect my allowance. What does your no relate to, maybe we're not talking about the same thing. Is there some government guidance on ISAs or is it all on individual bank's websites?

ktk

The previous ISAs' tax free status remains, so you will never have to pay tax on those investments. You have an allowance each year, so every year that you invested in an ISA has a tax free status. Even if you now transfer the old ISAs, they remain tax free. However, you must transfer them. If you cash them in and then try to reinvest that will count as this year's investment.

Hope that makes sense.

wheelz

I understand that the tax free status doesn't change, what was unclear from the other person's answer was whether the transfer amount of old ISAs counts towards your current year's allowance. Can someone confirm this please? I couldn't find that in the guide.

jimjames

No it doesn't count as was said earlier. Check the hmrc website if you need more confirmation.

colsten

wheelz wrote: »

Or does it count towards your new allowance (£15,400).

The 2015-16 allowance is £15,240, not £15,400.

eskbanker

wheelz wrote: »

I've read the isa guide on MSE but just not sure yet. Can I transfer ISAs (one or multiple) into a new one (provided they allow it) without it affecting the maximum ISA allowance per year? Yes
Or does it count towards your new allowance (£15,400). No

And can I open the 'transfer in ISAs' with a different provider to the 'new money' ISA (still to be opened for this year). Yes

Apologies, perhaps I was being a little too cryptic in my previous answer, but spell it out (hopefully) more clearly above!

wheelz

Thank you for clarifying that. :-)

wheelz

jimjames wrote: »

No it doesn't count as was said earlier. Check the hmrc website if you need more confirmation.

I was thinking where can I find this. I use You gov but hadn't thought it would be on hmrc. Well I thought people here might know as a colleague said this and wanted to double-check.

badger09

To be absolutely clear You musn't transfer your cash ISA.

You must ask your new ISA provider to arrange the transfer for you.

Any ISA subscription from previous tax years and the interest credited on it, has no effect on this year's allowance as long as the new ISA provider arranges the transfer.