Transfering ISA

Trickyblues

My wife and I are looking at putting money into cash ISAs. We haven't used our 2018/19 allocation yet, so want to open 1 cash ISA each using our full 20k. This money is coming from a low interest Savings account and will be used before 5/4/19. We then want to top up each one using our full 2019/20. This is again coming from a low interest Savings account and we would like to do this as soon after 6/4/19 as possible. We would then have TWO ISAs, each with 40k.
Now the tricky part. We also have an old Cash ISA with a substantial amount in it (70k+). This ISA does not mature until 24/7/19. We need to know if we can transfer this money into the two new ISAs (35k into each) when it matures, without losing the tax advantage afforded by the ISA status. We would be very grateful for any advice you can give us.

ColdIron

Your old ISA will either be in your name or your wife's name so you can only transfer it into the new ISA for the same person, you can't split it

Reed_Richards

ColdIron wrote: »

Your old ISA will either be in your name or your wife's name so you can only transfer it into the new ISA for the same person, you can't split it

Actually you can split it into as many individual ISAs as you like, two as you plan or more if you wish. And provided you follow the correct procedure you can do this without losing the ISA status and tax advantages. But you cannot change the ownership of the ISA, which is what ColdIron means.

xylophone

Now the tricky part. We also have an old Cash ISA with a substantial amount in it (70k+). This ISA does not mature until 24/7/19. We need to know if we can transfer this money into the two new ISAs (35k into each) when it matures, without losing the tax advantage afforded by the ISA status. We would be very grateful for any advice you can give us.

You do mean that one of you has £70k + in an ISA that matures in July?

If you/spouse arrange for transfer into the ISA where you/spouse have £40,000, you/spouse will then have more than £85,000 with one provider.

https://www.moneysavingexpert.com/savings/safe-savings/

Trickyblues

Thanks, Coldiron. The old ISA is in my wife's name. Are you saying that we can open two ISAs b4 5/4 with 20k in each then transfer a further 20k into each on say 7/4 then on 24/7/19 transfer 45k into my wife's new ISA giving her a balance of 85k (the maximum) and put the balance c30k into a different savings account with maybe a lower interest rate but with a different institution? It seems to be the way forward. Thank you so much for this advice. As you can see, this is my first time doing this, and I wasn't expecting so much impressive feedback.y4ddr4dd

ColdIron

Yes that sounds fine. I am guessing that you will be transferring the stray £30k into another ISA. Allow me to be slightly picky, when you say 'then transfer a further 20k into each on say 7/4' you really mean subscribe (put new non-ISA wrapped cash into). I know what you mean but transferring in ISA terms is what you will be doing with your old ISA. Just terminology but it matters with ISAs

Just an observation but [STRIKE]£110k+[/STRIKE] £150k+ is a lot of cash and if these are long term savings it might be worth considering a Stocks and Shares ISA for some of it, perhaps that errant £30k. Just something to consider

eskbanker

Trickyblues wrote: »

Are you saying that we can open two ISAs b4 5/4 with 20k in each then transfer a further 20k into each on say 7/4 then on 24/7/19 transfer 45k into my wife's new ISA giving her a balance of 85k (the maximum)

It may seem a bit pedantic but worth bearing in mind that in the context of ISAs, the term 'transfer' is usually used specifically to describe moving money from one ISA to another, via a defined process controlled by the receiving provider. Your second reference accurately refers to this process, but the first is basically subscribing to ISAs by paying in new money (from a non-ISA account). The £20K annual allowance applies specifically to paying new money in but not to transfers so it's quite an important distinction.

Trickyblues wrote: »

and put the balance c30k into a different savings account with maybe a lower interest rate but with a different institution?

And following on from the above, this would need to be done as an ISA transfer too, if you're seeking to protect its tax-free status by transferring it to another ISA.

Perhaps worth mentioning too that £150K+ is quite a lot to be holding in cash, given the risk of this losing real-terms value to inflation - do you have a use earmarked for it in the reasonably foreseeable future? If it's all long-term money then you might wish to consider investing some of it....

Trickyblues wrote: »

y4ddr4dd

Is that in Wales?

Reed_Richards

ColdIron wrote: »

Just an observation but [STRIKE]£110k+[/STRIKE] £150k+ is a lot of cash and if these are long term savings it might be worth considering a Stocks and Shares ISA for some of it, perhaps that errant £30k. Just something to consider

You may remember a time when it was not possible to transfer money from a Cash ISA to a Stocks and Shares ISA (nor vice versa) but those restrictions have been removed.

In a Cash ISA the value of your savings, with interest, is not likely to keep pace with inflation. If you were to invest in a fund that, for example, tracks the value of the FTSE100 Index you would (in the past) have always achieved a better return over a long time period. But the value of your investment will fluctuate and will certainly fall from time to time and for this type of investment to be right for you you need to be able to cope with the falls without worrying or losing your nerve. Not everybody can do that and if you cannot then Cash ISAs are the right thing for you

Reed_Richards

Trickyblues wrote: »

...Are you saying that we can open two ISAs b4 5/4 with 20k in each then transfer a further 20k into each on say 7/4 then on 24/7/19 transfer 45k into my wife's new ISA ...

Some ISAs do not allow transfers in and only take "new money". So the contributions you propose to make on 5th and 7th April would be new money but the ISA transfer you want to make on 24/7/19 is only feasible if the ISA you opened in April accepts transfers in.