Need a bit of guidance, to see if I am doing/understand this right

pr0f

Hiya guys and gals,
Been a lurker for years using all your bountiful knowledge haha

So I currently have an Instant Access cash ISA (from 14-15) that is up for transferring this month because the rate is going to plummet.

I am quite interested in trying out the Stocks and Shares ISA, I've always wanted to try and only now am I really in a position to feel comfortable enough to give it a go! Exciting

So for this financial year (15-16) can I do the following:

1. Move my current Cash ISA to a new provider, still Instant Access but I WONT be paying into it this year, i'd essentially be using it for the rate

2. Open a new Fixed Rate ISA (possibly with a different provider?) and put a small amount away in that for this year/however long the fixed term is

3. Start a Stocks and Shares ISA

I know the ISA rules allow me to mix and match a cash ISA with a stocks and shares ISA... But I don't know if I can move my current ISA, Open a new ISA to pay into for this year AND open stocks and shares

Hopefully all of that makes sense?

Thanks very much for any help you can give me!

badger09

Yes you can do exactly what you are suggesting, if that is what suits you best

KGriff

The rules state that you cannot contribute to more than one ISA type per tax year, not that you cannot open more than one ISA per tax year. There is a subtle difference.


I understand that a transfer is NOT classed as a contribution. Always make sure you use the new providers transfer form when transferring your funds.


So my understanding is you can open a cash ISA and transfer in your old ISA, but not add another single penny yourself, obviously any interest added by the new provider is not relevant in this instance.


Then you can open up a fixed rate cash ISA and also a stocks and share ISA with any provider(s) and contribute the annual ISA allowance between the two of them. (i.e £15,240)


Note you could not contribute to more than one cash ISA in the above scenario.


That is my understanding of the ISA rules, but the way they are worded does create some ambiguity.

pr0f

Thanks very much you two, you've thoroughly put my mind at ease!

badger09 wrote: »

if that is what suits you best

Well... I think it's what suits me best :P haha. Willing to give it a go!

maypole

Am I allowed to transfer a cash isa from 2013/14 into a cash isa 2014/15 or does it have to go into this current years allowance?

KGriff

Maypole the simple answer is yes providing the terms and conditions of the destination ISA allow it.

Any transfer of funds/money from a previous years ISA can be added to the current (or another) years ISA and it does not count towards the yearly allowance of the destination ISA. Also it has no bearing on the ISA allowance for the current tax year.

As an example...The current year 2015/16 allowance is £15,240 so you could put the whole of that amount into this years ISA and then complete a transfer form and bring in the money from your previous years ISA. So if you had £15000 in your old ISA you could end up with a final total of £30,240.

However (there are always exceptions to the rule) ...in your current years ISA you need to read the terms and conditions to make sure the new ISA allows transfers in from old ISA's. There are some ISA providers that choose to not allow transfers, in which case you are stuck with the annual limit (£15,240) and not a penny more. So check your terms and conditions when you open the new ISA.

If you open a fixed term ISA (one where you agree to leave your money for a fixed period without withdrawing from it) then also check the terms carefully as the provider may set a time limit by which you must apply to transfer in the old ISA funds ... Some ask for the transfer to occur within two weeks of opening the account or they may specify a date.

Hope that helps

jimjames

maypole wrote: »

Am I allowed to transfer a cash isa from 2013/14 into a cash isa 2014/15 or does it have to go into this current years allowance?

No, transfers have nothing to do with the current year's allowance.

You can transfer any ISA subject to the proviso that the current year's contributions have to be transferred as a whole not as a partial transfer.

You can transfer to any ISA that will allow transfers in.

KGriff

Maypole,

Jimjames is right, the money in old ISA's only count towards the annual allowance for the financial year in which the money was first deposited.

If you transfer it to a later years ISA, it does not count towards the annual allowance for the later year.

You can transfer the ISA, if the terms and conditions of the ISA (into which you are depositing the money) allows the transfer... So my advice would be to check the terms and conditions and if necessary, speak with the new (destination) ISA provider too.

maypole

Thank you all very much, that was most helpful.