S&S ISA transfer - another query

Aylesbury_Duck

Hi. I've initiated a transfer of evestor S&S ISA funds into my new Vanguard S&S ISA. evestor have just been in touch with this message:

"We are happy to proceed with the transfer however your provider has specified that the Vanguard funds held are to be transferred over in specie. Just so you are aware, there is a fee of £100 to transfer out per line of stock. Instead of proceeding with what has been requested from Vanguard, we wanted to make you aware that there is an alternative to have your funds sold down and transferred over in cash via cheque. There is no fee for this option."

I assume I just ask evestor to transfer in cash via cheque? I've only put £2500 in, all of it in this tax year. Will it therefore arrive as ISA-wrapped cash funds in Vanguard, with which I then purchase funds from the Vanguard options?

Linton

Yes, the cash will retain its ISA status as a this-year contribution and can be used to rebuy the Vanguard funds. The one risk is that the price will move against you in the meantime, however you would be somewhat unlucky if any loss there exceeded £100. You could equally well gain by being out of the market.

bowlhead99

Aylesbury_Duck wrote: »

. Instead of proceeding with what has been requested from Vanguard, we wanted to make you aware that there is an alternative to have your funds sold down and transferred over in cash via cheque. There is no fee for this option."

I assume I just ask evestor to transfer in cash via cheque? I've only put £2500 in, all of it in this tax year. Will it therefore arrive as ISA-wrapped cash funds in Vanguard, with which I then purchase funds from the Vanguard options?

Yes that's right. Let them know you'd like for the transfer to go ahead in cash - then the money will arrive over at Vanguard and once cleared it will be ready for you to purchase the fund of your choice on Vanguard's platform just as if you'd contributed cash from your own bank account to Vanguard. Except, as it is still an ISA transfer, the money has never left the ISA wrapper.

While doing this you will inevitably be out of the market, for perhaps a couple of weeks , which is the disadvantage of doing it as cash. However, the first to move it in specie (without selling and re buying) at £100 is 4% of your 2500 invested. On average, markets don't move by 4% in two weeks or even in a month or two. They will inevitably move a bit - so you won't have the same number of units after the transfer as before - but over a short time period the movement will on average only be a fraction of a percent, and is probably, broadly, as likely to be in your favour as it is to be against you.

*Edit, great minds etc Linton.

Aylesbury_Duck

Thanks very much both of you, very helpful.