How can i transfer my money out of an old ISA without losing my entitlement?

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Hello

I have an old ISA which is paying a terrible rate, I have roughly 8k. However i want to transfer the money from it into a savings account, Its a cash ISA so i can withdraw the money no problem.

The sticking point is that i have opened a help to buy ISA and i will transfer the first £1000 into there from the ISA and £200 there after. leaving me 7k.

I do not intend to open another ISA (i cant anyway) but transfer the money into a savings account when i find a decent one. Do i lose my ISA entitlement for that 8k i have withdrawn? and will it have any affect on the right to buy one i have just opened? Being able to only save £200 into the RTB wont take me through my ISA limit in the first year but want to head off any problems before i go moving money around.

I hope this makes sense.

Thanks

Comments

  • pinkdalek
    pinkdalek Posts: 1,355 Forumite
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    Have you funded the 8k ISA in this tax year?
    If you have then withdraw your ISA down to £1000 and then ask your Help To Buy ISA provider to do an ISA transfer, advising them of how much you have paid into your ISA in subscriptions this tax year.

    If you have not funded the £8k ISA this tax year there is nothing stopping you closing that, using £1000 of it to pay into the HTB ISA and then put the rest in a non ISA account.

    You can though transfer your £8k ISA elsewhere to a provider who will take ISA transfers in if their current ISAs are offering decent rates. (If the £8k ISA is previous tax year money). You would then need them to do the ISA transfer for you to avoid subscribing to two cash ISAs in the same tax year.
  • Coldred
    Coldred Posts: 43 Forumite
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    pinkdalek wrote: »
    Have you funded the 8k ISA in this tax year?
    If you have then withdraw your ISA down to £1000 and then ask your Help To Buy ISA provider to do an ISA transfer, advising them of how much you have paid into your ISA in subscriptions this tax year.

    If you have not funded the £8k ISA this tax year there is nothing stopping you closing that, using £1000 of it to pay into the HTB ISA and then put the rest in a non ISA account.

    You can though transfer your £8k ISA elsewhere to a provider who will take ISA transfers in if their current ISAs are offering decent rates. (If the £8k ISA is previous tax year money). You would then need them to do the ISA transfer for you to avoid subscribing to two cash ISAs in the same tax year.

    Since April i have only put in about 1k so in theory i can just close it and not lose much of my entitlement then?
  • masonic
    masonic Posts: 23,490 Forumite
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    I'm not really seeing a case for keeping savings of £8k in an ISA when you can get a better rate, probably tax free as well, outside of the ISA. If you are planning to buy a house in the next few years, preserving the ISA status long-term will not be necessary, so just go for the account with the highest net rate (which I'm sure won't be an ISA).
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