What happens to share dividents if i change isa provider?

s.illes79

Hi,

I have some shares on an ISA for 2015/2016 tax year with a bank

some divident is due in 2016/2017
what happens with dividends if I don't open an ISA with the same bank, but with an other bank?

do I still get paid into the ISA account opened in 2015/2016 or it will magically go to my other banks ISA account?

Thanks.

le_loup

If you transfer to another provider the dividends should follow.

Superscrooge

If you open a 2016/17 ISA with another bank. Your 2015/16 ISA will be unaffected and continue working just as it does now.

But you can only contribute to one S&S ISA in each financial year.

bowlhead99

s.illes79 wrote: »

what happens with dividends if I don't open an ISA with the same bank, but with an other bank?

do I still get paid into the ISA account opened in 2015/2016 or it will magically go to my other banks ISA account?

If the shares are still at the first bank and you did not transfer them anywhere, you simply opened up a new ISA for your 2016/17 contributions with a new bank, then there is no reason that the dividends would get paid to the second bank.The company paying the dividends does not know or care that you have opened up an ISA somewhere else and it simply pays out the money to its registered shareholder which is the first bank.

If the shares have been transferred to the second bank's ISA before the ex-dividend date for the shares, the company paying the dividends will send the dividends to the second bank because they are listed as the owner of the shares in the company's records at the time the rights to get paid dividends is checked.

If the shares have been transferred to the second bank's ISA after the ex-dividend date for the shares, the company paying the dividends will send the dividends to the first bank because they were listed as the owner of the shares in the company's records and the shares transferred to the second bank were transferred 'ex-dividend' i.e. without the rights to the latest dividend. So the first bank will receive the cash. In that situation:

- If the account is still open at the first bank, they may just leave the dividends in the account until you to notice it, so you could manually withdraw it or transfer out.

- If the account is not still open at the first bank because they closed the account when you transferred the shares out, they would send on the received cash to the second bank to which they had transferred the shares.

s.illes79

thanks,

one more question:
what happens if i keep my shares in the first bank's ISA and I do not open a new ISA for 2016/2017 and get some dividends after 6 of April ?

do I lose the tax benefit on them? or they will top up the old 2015/2016 ISA?

cheers

le_loup

s.illes79 wrote: »

or they will top up the old 2015/2016 ISA?

Yes. It will run until you sell out.

jimjames

s.illes79 wrote: »

do I lose the tax benefit on them? or they will top up the old 2015/2016 ISA?

Any income will remain with the ISA that generated it. You can choose whether to have the income paid out or reinvested so you may want to check the charges for the platform you are using for either option.