Cash ISA maturing

dwsO1

I invested £15000 in a cash ISA in April 2015.


I have just received notification that a 5 year fixed cash ISA (approx £12000) matures on 1st June. There are options to transfer the funds to other ISAs with the same provider (Leeds Building Society) or transfer to another provider.


As I have already used my allowance for the year (or most of it) will I have to withdraw the Leeds funds and find another way to invest which will be taxable or is there a way to keep these tax free funds?


I have tried to research this but am now confused and would appreciate help.

jimjames

An ISA always remains tax free unless you withdraw the money. So once it's in the wrapper you can transfer it as many times as you want.

If you are doing repeated 5 year fixes then you may be better off looking at investing rather than savings but need to bear in mind that the capital isn't guaranteed with that.

chris_m

dwsO1 wrote: »

As I have already used my allowance for the year (or most of it) will I have to withdraw the Leeds funds and find another way to invest which will be taxable or is there a way to keep these tax free funds?

No, don't withdraw them.
Find another ISA which you want to use and where the provider accepts transfers in, then get the new provider to request the fund from the old one. That way, the funds retain the tax-free status and it doesn't count as new money from an ISA allowance point of view. Presumably the ones that the Leeds offer will accept transfers in, otherwise it would seem a bit daft them offering.

Consumerist

Yes, as above.

You can build up many ISAs over the years, all earning tax-free interest on funds you have subscribed during previous tax years.

It is only new money, i.e. paid in during the current tax year, which is restricted by the annual allowance; which is £15,240 in this tax year.