ISA - do I have to transfer a nil balance?

ayr2019

Hello,

I contributed some money to an ISA with Foresters Friendly in this current tax year and then withdrew it, so my ISA balance with them is £0.00.

The reason for doing this was that I needed the money quickly, however now I am in a position to contribute to an ISA again.

However, I want to use a different provider. As my balance with Foresters Friendly is £0.00, do I have to do an ISA transfer to the new provider or can I just open a new ISA with the new provider?

FYI - both are stocks and shares ISAs.

Thank you in advance!

AnotherJoe

I think you'll have to transfer it because you can only contribute to one S&S isa in one year so if you opened a new one that would be two. Probably to simplify the transfer I'd put some money into foresters first.

soulsaver

Firstly are you sure you have any ISA balance left for this tax year?

masonic

Foresters Friendly offer flexible ISAs, so if that's what you have and you've paid in cash, then made a flexible withdrawal of the full balance without investing any of it, you have essentially opened an ISA without subscribing and could open another ISA of the same type without falling foul of the ISA rules.

However, if you've invested within the ISA and your investments have lost any money, the balance withdrawn would be less than the balance subscribed and you would have to use the transfer process.

Another option would be to use the cooling off period to cancel the ISA if you've only recently opened it and if available.

Alexland

Despite ISA flexibility remember that S&S investments are volatile so not suitable for dipping into when you need money. Ensure you have a cash buffer and only invest money which you don't expect to need for at least 5 years.