Internal transfer mistake

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
12 replies 1.4K views
The_stingemeisterThe_stingemeister Forumite
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edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
Had ISA's for years, but for 1st time I think I've cocked up, with 2 Nationwide ISA's. I recently transferred/closed the one to the better interest paying other one. This was after I paid in the maximum allowance around May time this year. I got a message saying that the tax free status is lost. Does this mean on just the recent internal transfer money or the whole amount in the account?

I thought that the internal transfer (not being "new ISA money") would be ok :o.
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Replies

  • eskbankereskbanker Forumite
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    If you followed their transfer process it shouldn't have affected tax-free status in any way, what exactly did the message say?
  • colstencolsten Forumite
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    I recently transferred/closed the one to the better interest paying other one.

    What exactly did you do - transfer or close the ISA? They are two very different things.

    Does the ISA you retained allow transfers in?

    Which account does the message you got refer to?
  • "customer is aware of loss of tax free staus"...(I wasn't :().
    I transferred then closed account. The account I have left is the Instant Isa saver issue 2. I think it allows transfers in.
  • colstencolsten Forumite
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    How did you transfer?

    Did you request and use an ISA transfer pack? https://portal.nationet.com/Nationwide/quickapp/onlineisa/transferRequest.asp?app=ext

    Or did you do it in Branch?

    The above two are the only two ways you can make an internal ISA transfer, according to the Nationwide website. http://www.nationwide.co.uk/products/isas/transfer-your-isa
  • colsten wrote: »
    How did you transfer?

    Did you request and use an ISA transfer pack? https://portal.nationet.com/Nationwide/quickapp/onlineisa/transferRequest.asp?app=ext

    Or did you do it in Branch?

    The above two are the only two ways you can make an internal ISA transfer, according to the Nationwide website. http://www.nationwide.co.uk/products/isas/transfer-your-isa

    No.
    Online banking.
  • colstencolsten Forumite
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    That's probably your answer then. You didn't follow the ISA transfer procedure and therefore your money lost its ISA status. Worse still as you say you had already contributed the max for this year, HMRC will pull you up sometime next year because you exceeded your 2015-16 ISA allowance.

    In your shoes, if a lot of money is involved, I would have a friendly chat with Nationwide, along the lines that you assumed everything was fine as you transferred your money from a Nationwide to a Nationwide ISA, and you had read 'somewhere' that this was allowed. If they feel generous, and if they are certain HMRC won't slap them for it, they might repair things for you.

    If it's just a few thousand, I'd probably just take the money and put it into a decent interest paying current account, as there are plenty that pay more than 1.4% after tax, on up to £50,000ish. Why do you, btw, not have your money in a FlexClusive ISA if you have to have an instant access ISA?
  • You must always get the recipient to do the transfer, even if it with the same bank or bs. The recipient in this case being the new account.

    Do the transfer any other way is breaking the rules, but I guess you know that now. What made you think any differently?

    fj
  • colsten wrote: »
    That's probably your answer then. You didn't follow the ISA transfer procedure and therefore your money lost its ISA status. Worse still as you say you had already contributed the max for this year, HMRC will pull you up sometime next year because you exceeded your 2015-16 ISA allowance.

    In your shoes, if a lot of money is involved, I would have a friendly chat with Nationwide, along the lines that you assumed everything was fine as you transferred your money from a Nationwide to a Nationwide ISA, and you had read 'somewhere' that this was allowed. If they feel generous, and if they are certain HMRC won't slap them for it, they might repair things for you.

    If it's just a few thousand, I'd probably just take the money and put it into a decent interest paying current account, as there are plenty that pay more than 1.4% after tax, on up to £50,000ish. Why do you, btw, not have your money in a FlexClusive ISA if you have to have an instant access ISA?


    Its a large sum. So you think they'll make the whole amount as taxed, not too disastrous as 1.4% minus 20% is not that bad. Or will the interest be completely lost? The infuriating thing is the internal transfer was only £400 and to compound that the interest is due on september 30th this month! I should of just placed it anywhere but that ISA :mad:.


    You must always get the recipient to do the transfer, even if it with the same bank or bs. The recipient in this case being the new account.

    Do the transfer any other way is breaking the rules, but I guess you know that now. What made you think any differently?

    fj


    Just a mistake. Probably made it as I didn't think I was adding and going over the allowance. Was thinking after adding the maximum earlier in the year of "new" isa money that the sum already in an old ISA from years gone by didn't count. It was just springcleaning or transferring a small amount in an account with inferior interest.
    Also it was the interest I moved (I had emptied but not closed the inferior account in March). The interest showed up on August 31 and unfortunately I acted.
  • colstencolsten Forumite
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    Its a large sum.
    so why is it in a 1.4% account and not at least in a FlexClusive ISA?
    So you think they'll make the whole amount as taxed, not too disastrous as 1.4% minus 20% is not that bad. Or will the interest be completely lost?
    the £400ish that you mis-transferred in will not earn tax-free interest. The money already in the target ISA should be unaffected as you deposited it in accordance with the rules.

    You should really be speaking with Nationwide.
  • colsten wrote: »
    so why is it in a 1.4% account and not at least in a FlexClusive ISA?

    the £400ish that you mis-transferred in will not earn tax-free interest. The money already in the target ISA should be unaffected as you deposited it in accordance with the rules.

    You should really be speaking with Nationwide.

    My main bank account is not with Nationwide. I don't pay-in the £750? per month to qualify. Will contact them, as I said I think it was the interest thing that caught me out. Couldn't do any harm to transfer the £400 out I suppose, so the "over the limit" amount had only been for 2 weeks.
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