Maxi ISA Transfer? - Help appreciated

Telain

Hello all,

Very new to this so here goes. I have a 2005/6 maxi isa (about £5k) and i want to get out of stocks and shares but i dont want to loose my tax free status. Can i transfer this to anything other than another stocks and shares ISA and if so how?
The same applies to my mother, she has done much better and has two previous ISA's now worth £30k and she also wants out of stocks and shares but without loosing tax free status.

If we cant transfer and have to cash in, do we have to pay tax on any interest earned from our original investment?

Any help would be greatfully received.

Aegis

I'm not aware of any method of transfering a maxi ISA into a cash ISA, and suspect that it can't be done. However, within a maxi ISA there is provision for some of the money to be held in cash accounts, retaining the tax-free status that the cash mini ISA has. Contact your provider to see if you can make use of this before giving up your tax free status.

If you really want out, you won't be charged anything on gains realised within the ISA, but once you put the money into a normal savings account, you will immediately start paying interest on anything you build up there.

Out of interest, why not just change your asset allocation to something a little more suited to your new risk profile, assuming that you're bailing out because of increased volatility?

dunstonh

Can i transfer this to anything other than another stocks and shares ISA and if so how?

No. However, you can use non stockmarket funds such as fixed interest and property.

If we cant transfer and have to cash in, do we have to pay tax on any interest earned from our original investment?

no tax but there is no reason to surrender the investment. Sure, reduce the risk down if you wish and even go 100% non stockmarket if necessary until you feel ready to return but dont lose the tax wrapper for no reason. (your mother, if over 65, may suffer age allowance reduction if she takes money out of the ISA into cash).

maisie_2

In the same context, I have read articles about moving from Equity ISAs into "Cash Funds", which can presumably be within the ISA wrapper. But what are 'Cash funds', where can I get advice - or would anyone stick their neck out with suggested funds or types of funds please?

dunstonh

But what are 'Cash funds'

They are funds which put the money into a range of fixed term deposits and some gilts i.e. M&G high Interest.

where can I get advice

Any investment IFA.

would anyone stick their neck out with suggested funds or types of funds please?

I've given the name of one but it is not a recommendation or suggestion. It is an example.

These funds are not seen to be long term answers. They are typically used for holding purposes whilst you make a decision or whilst you want to be out of market for a while.

maisie_2

Thanks very much Dunstonh. I am approaching an age when I ought to be thinking of coming out of higher risk investments, particularly with present fluctuating market. Like the previous Newbie, I'm reluctant to lose the ISA tax shelter and would like a reasonably safe vehicle, for the long term, with a reasonable,tax free return. Yet you seem to be saying that something like M&G High Interest is only a temporary solution. Is there such a beast for a long term answer please?

dunstonh

I am approaching an age when I ought to be thinking of coming out of higher risk investments, particularly with present fluctuating market.

Remember stockmarket is not all one risk level. You can mix and match and alter the fund mix to include the lower risk end of the stockmarket and come out of the high risk risk end. Maybe have a 70/30 split with 70% non stockmarket invested in UK other bonds, fixed interest and property with 30% in UK equity income.

M&G High Interest is only a temporary solution. Is there such a beast for a long term answer please?

Temporary or part of your cash element of your portfolio is probably a better way of putting it. The returns are not bad but they are not on par with savings accounts

1 year 4.21%
3 year 12.30%
5 year 18.92%