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Transferring cash isa to stocks n shares
Comments
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Re. the credit card groceries, I just meant that the saleswoman was scribbling down all my monthly outgoings and came out with the potential cashback figure on the basis of my paying for every little thing on a credit card (which she never mentioned). She also obscured the monthly fee for the account. Don't get me wrong, I'm sure the account is good for many ppl, but not me, as I want things kept as simple as possible. I like Halifax reward account for this reason - they pay £5 a month and there's no faffing with credit cards or fees to balance out, etc. That's just my preference!
"Someone else" is my mum, btw! Not a random joe bloggs. ...But yes, I get what you're saying; I probably need to read & understand more the concept. Yes, I am in it for the long term, so I would be willing to ride through the dips without panicking.0 -
Re. the credit card groceries, I just meant that the saleswoman was scribbling down all my monthly outgoings and came out with the potential cashback figure on the basis of my paying for every little thing on a credit card (which she never mentioned). She also obscured the monthly fee for the account. Don't get me wrong, I'm sure the account is good for many ppl, but not me, as I want things kept as simple as possible. I like Halifax reward account for this reason - they pay £5 a month and there's no faffing with credit cards or fees to balance out, etc. That's just my preference!
Apologies if I have missed how grocery purchases relate to investments as these should be totally independent decisions. Charges for the Santander 123 current account and their 123 credit card have absolutely nothing to do with the charges on the Santander S&S ISA.
As it happens, I have held the 123 current account and credit card for years, as they are offering me benefits. I also hold Halifax Reward accounts - these accounts are not mutually exclusive.
But current accounts and credit cards should not influence in any way who you hold your investments with. To the best of my knowledge, no S&S provider has ever offered any benefit to anyone who holds another account with some other part of their organisation - it would probably be against their licence terms if they did, and there would almost certainly be no advantage to the customer whatsoever.
Did you find out what the Santander charges for S&S ISAs are?0 -
Apologies if I have missed how grocery purchases relate to investments as these should be totally independent decisions. Charges for the Santander 123 current account and their 123 credit card have absolutely nothing to do with the charges on the Santander S&S ISA.
The only reason I mentioned that initially was because Santander got a massive fine for giving crap advice on investments. My mum, however, was given clear advice at Santander re. an investment, but we got a deceptive little c**t selling us the 123 account, so I was surprised that Santander had been praised for its customer service re. 123 account. I know investment is not attached to current acc.
Yes, current accounts aren't mutually exclusive, so long as you either have big monthly wages coming in to fill them, or time on your hands to keep moving money back n forth and/or DDs paid from yourself to yourself.0 -
[STRIKE]There is no HMRC rule that says when you transfer current year money from a cash ISA to a S&S ISA you must transfer the whole cash ISA amount. Any portion of it is fine. Any money transferred from cash ISA to S&S ISA will be considered to be a S&S ISA subscription, no longer a cash ISA subscription.If you want to transfer from an ISA you made a deposit into this year, you must transfer the entire deposit for the year (HMRC rules).
You're perhaps confused by the rule which does exist, that if you are transferring current year money to an ISA of the same type (cash or S&S) you must transfer all of the money. This doesn't apply to moves from cash to S&S or S&S to cash.[/STRIKE]
For a correction to this that explains how to do it, see my following reply.0 -
There is no HMRC rule that says when you transfer current year money from a cash ISA to a S&S ISA you must transfer the whole cash ISA amount. Any portion of it is fine. Any money transferred from cash ISA to S&S ISA will be considered to be a S&S ISA subscription, no longer a cash ISA subscription.
You're perhaps confused by the rule which does exist, that if you are transferring current year money to an ISA of the same type (cash or S&S) you must transfer all of the money. This doesn't apply to moves from cash to S&S or S&S to cash.
I am not confused, as HMRC rules do prescribe that the entire current year's subscription must be transferred. No distinction between cash and S&S.
https://www.gov.uk/individual-savings-accounts/transferring-your-isaIf you want to transfer money you’ve invested in an ISA this current year, you must transfer all of it.
For previous years, you can choose to transfer all or part of your savings.0 -
The current rules explicitly cover S&S<>Cash transfers:I am not confused, as HMRC rules do prescribe that the entire current year's subscription must be transferred. No distinction between cash and S&S.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/375474/isa-guidance-notes.pdf11.12a Where current year subscriptions are being transferred from a cash ISA to a stocks and shares ISA, or, from 1 July 2014, from a stocks and shares ISA to a cash ISA, the current year subscriptions
- are transferred in whole (including any related income), and...0 -
And for those wanting to see the actual legalese, it's all in this regulations document, which also clearly states, in Regulation 23, item 3 (page 64), which applies to all ISA accounts that are not JISAs:The current year’s subscriptions may only be transferred as a whole (with or without the whole or part of any previous years’ subscriptions)0
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In spite of what Colsten wrote and those references to the Guidance notes, it is still possible to do a partial transfer this year. There are three main ways, two that will normally work now and have worked for years and another that is to be introduced this autumn:As Colsten says above, I would have to move the entire allowance I've invested this yr, so I am now thinking that I'll shelve the idea until Oct when my previous isa reaches the end of its fixed term and use some of those funds.
[STRIKE]1. A self-transfer using the rules from 12.30 through 12.33:
"Investor error - Self transfer
12.30 ISA investors must transfer their ISAs through the ISA manager. Investors cannot transfer an ISA by closing it and opening a new ISA with the new ISA manager (commonly known as ‘self transfer’), even if the investor is moving from one ISA product to another with the same manager.
12.31 Blank
12.32 However, where
o the investor subscribes to two cash ISAs, in the same tax year, and
o subscriptions to the first ISA subscribed to were valid, and
o all of the current year subscriptions to the first ISA subscribed to were withdrawn (whether or not that ISA was closed) (see paragraph 12.33) before subscriptions to the second ISA were made the subscriptions to the second ISA may be valid (see paragraph 12.32a)
12.32a The first cash ISA to be self-transferred in a tax year is valid, and need not be repaired.
The second (and any subsequent) self-transferred cash ISA is not valid and is not eligible for repair.
12.33 The first cash ISA may be closed and all the funds held in the ISA withdrawn (including any subscriptions for earlier years) or the first cash ISA may remain open and after the self-transfer will hold only subscriptions which were made in previous years. If the ISA remains open, no further subscriptions can be made to it in the tax year of the self-transfer.
For Example
Mrs Cooper subscribes £4,000 to a cash ISA with Anybank plc on 20 April 2012. She closes it on 30 November 2012, then subscribes to a second cash ISA with Betterhomes Building Society on 3 December 2012. The subscriptions to the second cash ISA are valid ..."
This is currently normally handled by HMRC telling you after the end of the tax year that you broke the formal rules, don't do it again. You should not expect to be able to do this more than once in your lifetime, though given the planned rule change HMRC may just cease any attempt at enforcing a rule that appears to become moot later this year.
So, using this rule you could withdraw all of the current year money from the cash ISA, pay some into S&S ISA and some into cash ISA, achieving the partial move you're after.[/STRIKE]
2. The announcement from Budget 2015 page 58:
"1.225 The government will allow ISA savers to withdraw and replace money from their cash ISA without counting towards their annual ISA subscription limit for that year, as long as the repayment is made in the same tax year as the withdrawal. This will enable savers to access their ISA savings more flexibly without losing the benefits they have built up. These changes will be introduced in autumn 2015, following consultation with ISA providers."
It's not certain yet but there may be a restriction to having to redeposit to the place where the money originally came from, particularly if the intent is to allow withdrawing and redepositing more than the annual ISA contribution allowance. As with the earlier way you will presumably be able to withdraw the current year money then split it and put some into cash ISA and some into S&S ISA.
3. Transfer all of the current year cash ISA to S&S and some of the past year S&S to cash. Not possible if transfers in to the cash ISA aren't permitted and of course only possible if you already have something in an S&S ISA.
I suggest that you wait until the autumn rule change since that seems to fit with the end of your fixed rate deal. Though personally I think it might be best just to transfer the lot into the &S ISA anyway, to get likely better rates there.
Colsten and Masonic are both right about the rules they mentioned, just not considering all possible rules that can be used to achieve the desired effect and the proposed change to the rules. My original reply was still entirely wrong, though.0 -
In spite of what Colsten wrote and those references to the Guidance notes, it is still possible to do a partial transfer this year. There are three main ways, two that will normally work now and have worked for years and another that is to be introduced this autumn
I still can't see how this would help the OP (who has put their full £15,240 into a cash ISA already and wants to know whether it is possible to transfer some of it to S&S).
A self transfer is essentially a transfer of the entire deposit as you need to close your old ISA in the process of a self transfer. No partial transfer there. You cannot leave a bit behind.
The OP can, by all means, withdraw some of the money they deposited this year, but they cannot deposit it again into the same or any other ISA this year under the current rules (that both I and masonic have provided links to). We shall see what the new rules will be in autumn - currently there aren't even consultation papers about them on the web, not to talk about the actual future rules. Whether partial transfers will be allowed in future is pure speculation at this stage.
Can't speak for masonic but I certainly have considered all the possible current rules for cash to S&S transfer. I do maintain it is presently not possible to make a partial transfer of OP's cash ISA.Colsten and Masonic are both right about the rules they mentioned, just not considering all possible rules that can be used to achieve the desired effect
I do concede that I have not considered future rules, and that it might perhaps be possible to make a partial transfer / self-transfer later in the year. Who knows what the rules will be later this year - I certainly don't.and the proposed change to the rules.
We agree on this one. Peace. :cool:My original reply was still entirely wrong, though.0 -
I'm of the same opinion.Can't speak for masonic but I certainly have considered all the possible current rules for cash to S&S transfer. I do maintain it is presently not possible to make a partial transfer of OP's cash ISA.
Coming back to jamesd's three potential workarounds...
1) I believe this will result in the subscription of more than the overall limit in total. Since £15,240 has been subscribed to a cash ISA in the 2015/16 tax year, the self transfer will not change that fact, even if only part of the money originally subscribed is replaced in the second cash ISA. Therefore, any subscriptions to the S&S ISA would be invalid, since the whole allowance has already been used for the cash component.
2) We can only speculate, but I cannot see a scenario in which this could be allowed, since ISA managers are going to have to police these temporary removals to some extent and if multiple ISA managers are involved then they will be unable to do so and HMRC's SSO compliance unit is going to have a huge workload wading through annual returns and reconciling accounts as a result.
3) This is a possibility, but it appears the OP does not have an existing S&S ISA with previous years subscriptions that could be transferred the other way.
Also we have, 4) Wait until after the end of the tax year, which could be the plan unless option 2 opens up in the mean time.0
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