Transfering Cash ISA into Stocks & Shares ISA?

MrMartyn

I have an old Cash ISA with "Provider A" that I haven't contributed to in the current tax year (probably not in the previous year either).

I have a Stocks & Shares ISA with "Provider B" that I am currently contributing to in this current tax year and that I might continue contributing to in the next and future tax years.

I would like to transfer some (not all) of the money from my old Cash ISA (Provider A) into a new share-dealing Stocks & Shares ISA with "Provider C". I do not intend to contribute any new money into this new ISA in the current tax year (nor in any future tax year in which I am already contributing to another Stocks & Shares ISA).

I was under the impression that this would be OK because I am not putting any new money into the new S&S ISA. I'm not sure, but I think the term "subscribe" means "put new money into", whereas I am not intending to do that. I simply want to use some of my old Cash ISA money to trade shares and ETFs, within an ISA wrapper. My existing Stocks & Shares ISA doesn't appear to provide the sort of facilities I need (it seems more aimed at funds rather than shares of individual companies).

However... Provider C has told me that I cannot do this because I'm already contributing to a Stocks & Shares ISA.

Is what I want to do in breach of the ISA rules? I thought with the new ISA rules I could transfer from a Cash ISA to any other ISA I wanted, as long as I don't put new money into more than one Stocks & Shares ISA in the same tax year?


Thanks.

Disclaimer: I am not an expert. My comments are my opinions only and should not be taken as advice. Any information I post may or may not be correct, and should therefore not be relied upon as fact. If you act on anything I post here you do so entirely at your own risk. I do not accept any liability.

colsten

You are absolutely correct about the ISA rules and provider C is totally wrong.

bigadaj

Yes you're right and the provider is wrong if that is what they have said.

Government rules aren't necessarily the only thing though, providers have their own rules and I wonder if this could be a problem. Some providers won't split isas up, though you're problem appears to be with the receiver of the monies rather than the current holder.

You can try and escalate to someone more senior in the organisation, if you named the providers then that might help.

bigfreddiel

I've transferred cash to s&s isa many times, just make sure the receiver does the transfer, ie the s&s ISA provider does the transfer.

fj

Pincher

I transferred some cash from a cash ISA to a S&S ISA recently.
I had to declare which tax year the money belonged to. How! Some of the money is interest, which obviously was generated from cash from 2011, 2012, 2013 and 2014. If I had drip fed the cash monthly, it's even more bizarre. Also, did I put some money in Cash ISA, and some in S&S?

If I was an ISA provider, I wouldn't touch old ISAs with a barge pole. Whatever admin setup you create, they will come along and poke holes in it, and fine you for not enforcing the "rules", if something goes wrong. You have no control over what contributions were made years ago, and the records the last ISA provider supplies could be full of errors by some school drop out apprentice who couldn't count.

masonic

Pincher wrote: »

I transferred some cash from a cash ISA to a S&S ISA recently.
I had to declare which tax year the money belonged to. How! Some of the money is interest, which obviously was generated from cash from 2011, 2012, 2013 and 2014. If I had drip fed the cash monthly, it's even more bizarre. Also, did I put some money in Cash ISA, and some in S&S?

You do understand that an ISA subscription is money paid into the ISA from an external source, not interest paid within the ISA, don't you?

If I was an ISA provider, I wouldn't touch old ISAs with a barge pole. Whatever admin setup you create, they will come along and poke holes in it, and fine you for not enforcing the "rules", if something goes wrong. You have no control over what contributions were made years ago, and the records the last ISA provider supplies could be full of errors by some school drop out apprentice who couldn't count.

Huh? Who is "they" and why on earth do you believe there is any material risk "they" will come along and fine ISA managers who have accepted transfers of ISAs that are found to contain invalid subscriptions received by a previous ISA manager?

Archi_Bald

Pincher wrote: »

I had to declare which tax year the money belonged to. How! Some of the money is interest, which obviously was generated from cash from 2011, 2012, 2013 and 2014. If I had drip fed the cash monthly, it's even more bizarre. Also, did I put some money in Cash ISA, and some in S&S?

Which provider was that? It's the first time I hear that you have to declare "which tax year the money belonged to". There is nothing in the HMRC Guidance Notes for ISA Managers that asks for this information to be collected.

Pincher wrote: »

If I was an ISA provider, I wouldn't touch old ISAs with a barge pole. Whatever admin setup you create, they will come along and poke holes in it, and fine you for not enforcing the "rules", if something goes wrong. You have no control over what contributions were made years ago, and the records the last ISA provider supplies could be full of errors by some school drop out apprentice who couldn't count.

The ISA providers receiving transfers-in do not have any duty to check the validity of subscriptions made in the past, or indeed any of the data the old provider makes available.

Pincher

Archi_Bald wrote: »

Which provider was that? It's the first time I hear that you have to declare "which tax year the money belonged to". There is nothing in the HMRC Guidance Notes for ISA Managers that asks for this information to be collected.



The ISA providers receiving transfers-in do not have any duty to check the validity of subscriptions made in the past, or indeed any of the data the old provider makes available.

HSBC Loyalty Cash ISA to HSBC InvestDirect S&S ISA.

I was transferring £20k, out of £50k.

Obviously ISA providers have to file your ISA contributions for your current year to "them". You are saying the provider don't need to care about where legacy contributions came from, but they obviously care a lot. As the cash ISA now has thousands in interest, accumulated over many years, I wonder what will happen if I want to transfer £30k, and declare it's as 2014 cash contributions, which was about 15k.

I am guessing, if I had contributed say £1,000 into the S&S ISA in 2014, so the computer has a 2014 flag already raised on that account, transferring in £30k that purports to be 2014 cash ISA contribution will really confuse the computer.

If I had been slutty, and contributed to multiple ISA providers over the years, paying into both Cash and S&S ISAs, it would be a huge mess to sort through, to check whether I abused the limits or not.


When I transferred the Cash ISA to HSBC, it was the whole cash ISA, I didn't have to say which years. I assume this is because the ISA transfer comes with a contribution history that is clear about which years the money belonged to. e.g. 2011,2012,2013 and 2014.
2011 and 2012 were under Nationwide Building Society.

Archi_Bald

You obviously had the bad fortune to deal with someone in HSBC who isn't familiar with ISA transfer rules.

I have never seen an ISA transfer form that requires you to detail your previous years' subscriptions. The transfer form HSBC have online is no exception.

The only time you need to declare your subscription amount is if you want to make a partial transfer, and if the transfer sum includes subscriptions made in the current tax year.

Interest never counts towards your subscriptions, and therefore not towards your allowances.

I also think you are wrong to assume that your current ISA provider must maintain a history of your ISA(s) from before the transfer. They are not required to do so by the HMRC. All they have to do is make sure you are not depositing more than your current year allowance with them, and report the current year data to HMRC at the end of the tax year. HMRC will then check that you didn't exceed your allowance by subscribing with multiple providers. Neither your ISA provider nor HMRC are interested in how much of your allowances you used in prior years as each year gets closed at the end of a tax year.

EDIT: what's "slutty" about having multiple ISAs?

Pincher

Archi_Bald wrote: »

EDIT: what's "slutty" about having multiple ISAs?

I'm a serial monogamist.

A "!!!!!!" contributes to more than one ISA provider in one tax year.

Very odd. This is the online version:

https://www1.trading.investdirect.hsbc.co.uk/ImageServlet?fileName=pdf/IVD_ISA_TRSF.pdf&offering=id


The one that they sent me through the post is the one that asked for the contribution years the money belonged to.




21:59 UK 12 Sep 2015
* Transferring Your ISAs To Us
* *
* *
* You can transfer your current or previous years Stocks and Shares ISA and monies saved in a Cash ISA to a HSBC InvestDirect Stocks and Shares ISA by completing the transfer form.
* *
* The form will only take a few minutes to complete for each ISA Manager you hold ISA plans with. Please note that a separate transfer form must be completed for each ISA Manager.

You will need to have to hand:
• Name and Address of your current ISA Managers
• Account Number for each ISA you wish to transfer

* The transfer process will take up to 6 weeks, during which time you will not be able to trade in the ISA being transferred.
*
* You may be able to transfer in investments or sell all investments and transfer as cash. If you elect to transfer in investments, any investments that are not eligible to be held in a HSBC InvestDirect ISA will be sold and transferred as cash.
* *
* If you do not have a printer email us and we will send you a transfer form to complete and return to us.
*
*
* If you have a printer and wish to print a transfer form click 'Print Form' to continue.
* I would like to open an ISA for the current tax year .

Archi_Bald

Thank you for confirming that you were not asked to provide details of your subscriptions for previous tax years, and for your definition of a "!!!!!!".

Regarding the latter, I should like to say that I am not sure what you mean by contributing to more than one ISA provider in one tax year but that it is entirely legal to subscribe to both, a cash and an S&S ISA in the same tax year, as long as you keep your total subscription within your allowance for the tax year. I am sure you know what I mean.

Pincher wrote: »

I'm a serial monogamist.

A "!!!!!!" contributes to more than one ISA provider in one tax year.

Very odd. This is the online version:

https://www1.trading.investdirect.hsbc.co.uk/ImageServlet?fileName=pdf/IVD_ISA_TRSF.pdf&offering=id


The one that they sent me through the post is the one that asked for the contribution years the money belonged to.




21:59 UK 12 Sep 2015
* Transferring Your ISAs To Us
* *
* *
* You can transfer your current or previous years Stocks and Shares ISA and monies saved in a Cash ISA to a HSBC InvestDirect Stocks and Shares ISA by completing the transfer form.
* *
* The form will only take a few minutes to complete for each ISA Manager you hold ISA plans with. Please note that a separate transfer form must be completed for each ISA Manager.

You will need to have to hand:
• Name and Address of your current ISA Managers
• Account Number for each ISA you wish to transfer

* The transfer process will take up to 6 weeks, during which time you will not be able to trade in the ISA being transferred.
*
* You may be able to transfer in investments or sell all investments and transfer as cash. If you elect to transfer in investments, any investments that are not eligible to be held in a HSBC InvestDirect ISA will be sold and transferred as cash.
* *
* If you do not have a printer email us and we will send you a transfer form to complete and return to us.
*
*
* If you have a printer and wish to print a transfer form click 'Print Form' to continue.
* I would like to open an ISA for the current tax year .