Transfer cash ISA

boubou20

am glad someone is as clueless about ISAs as i am (and also have had ISAs for years- but prob not used them to best potential as i have never got a handle on the rules). I had to withdraw some  money from one of my isas  this year (it had been a fixed rate one but had expired (or is that matured) last year and was now a cash isa that i had failed to do anything about. Will i be penalised (or are all cash isas instant access?) ie lose some interest (years ago i was lead to believe if you withdrew money from an isa you lost a years worth of interest). Maybe this is also what Mark1000 is concerned about. Also i once had 3 isas by accident (again years ago i was led to believe one could only have one cash isa and one "other"- but it happened due to transferring some to a fixed and some to shares isas while the empty isa account remained open- i ended up getting it closed eventually). Are there penalties for moving money out of an isa (ie NOT transferring to another isa)? Can i take the opportunity to hijack this thread and ask folk- i have 2 cash isas (rubbish interest) 1) can i transfer the both into a new isa with a new provider? 2) from what has been said- am i right in saying that removing the money earlier in the year will not affect what i can contribute? (again years ago i got told if you took money out of an isa you could not put money back in it, in the same tax year.- i think i got a lot of bad info) ta!

masonic

boubou20 said:

Will i be penalised (or are all cash isas instant access?) ie lose some interest (years ago i was lead to believe if you withdrew money from an isa you lost a years worth of interest).

You may be penalised. Not all ISAs are instant access. You would need to refer to the account specific terms and conditions.

boubou20 said:

Also i once had 3 isas by accident (again years ago i was led to believe one could only have one cash isa and one "other"- but it happened due to transferring some to a fixed and some to shares isas while the empty isa account remained open

There is no limit to the number of cash ISAs and S&S ISAs you can hold. You may only pay new money into one ISA of each type per tax year.

boubou20 said:

Are there penalties for moving money out of an isa (ie NOT transferring to another isa)?

There are no penalties for withdrawals from cash ISAs and S&S ISAs, beyond any account specific fees and penalties.

boubou20 said:

ai have 2 cash isas (rubbish interest) 1) can i transfer the both into a new isa with a new provider? 2) from what has been said- am i right in saying that removing the money earlier in the year will not affect what i can contribute? (again years ago i got told if you took money out of an isa you could not put money back in it, in the same tax year.- i think i got a lot of bad info) ta!

You can transfer both ISAs to a new provider. If an ISA is flexible, you can withdraw money and pay it back in the same tax year without it affecting your allowance for the current tax year; if it is not flexible, you can withdraw it, but when you pay it back in it would count against your allowance for the current tax year, so if you paid £15k into an ISA this tax year and withdrew £10k, you'd only be able to pay a maximum of £5k back in during the same tax year.

Frozen_up_north

Mark1000 said:

Dear Sir,
I would like to ask one final question if I may. If one was to transfer their ISA to an easy access account I assume that as long as one does not directly take it out all should be well?

Many thanks

By “Easy access account” do you mean an ordinary bank/building society savings account? If so, in order to do that you need to transfer the money to your bank account, losing the tax free ISA status in the process, then open the easy access account and pay the money in.

Generally, a cash ISA will have less interest than a fixed term savings account, as money in an ISA can be withdrawn at any time. Probably not dissimilar to an easy access account in that regard though.

Cash savings, in or out of an ISA, are currently experiencing pitiful return rates, well below inflation. The returns on current accounts are dwindling too, the Santander 123 was good while it lasted.

Gsea

Hi,

Sorry for piggy backing on your thread but hopefiully my question will be usefull on this thread.

I'm looking to move £20k from a larger cash Isa to a S&S Isa, but the new provider will not accept partial transfers from cash Isa's.

I understand that you should ideally only move from Isa-Isa to prevent loss of annual allowance etc. However, as I have not used any of this years allowance I'm thinking I could withdraw the £20k from the cash Isa and open the S&S Isa with the £20k "new money"?

Providing I do this before the new tax year it will not impact on next years allowance.  Have I miss understood anything which will result in me loosing out now or in the future.

Many thanks

Gsea

eskbanker

Gsea said:

I'm looking to move £20k from a larger cash Isa to a S&S Isa, but the new provider will not accept partial transfers from cash Isa's. 

I understand that you should ideally only move from Isa-Isa to prevent loss of annual allowance etc. However, as I have not used any of this years allowance I'm thinking I could withdraw the £20k from the cash Isa and open the S&S Isa with the £20k "new money"?

Providing I do this before the new tax year it will not impact on next years allowance.  Have I miss understood anything which will result in me loosing out now or in the future.

If you have no plans to pay any new money into ISAs this tax year then withdrawing £20K from a cash ISA and redepositing it as new money into a S&S ISA works, but if you (or any other reader in this scenario) wanted to keep your options open then you could transfer £20K into a new cash ISA opened specifically for this purpose and then transfer that in its entirety to the S&S ISA, thereby avoiding a partial transfer to the latter.

Gsea

eskbanker said:

If you have no plans to pay any new money into ISAs this tax year then withdrawing £20K from a cash ISA and redepositing it as new money into a S&S ISA works, but if you (or any other reader in this scenario) wanted to keep your options open then you could transfer £20K into a new cash ISA opened specifically for this purpose and then transfer that in its entirety to the S&S ISA, thereby avoiding a partial transfer to the latter.

Thanks eskbanker,

I never considered opening a new ISA, transfering in/out and then closing the account. If my original plan works I'll stick with it on this occasion, thanks for the reassurance. 

Gsea

Hi all,

With the markets in free fall I want to get ready to jump into a S&S ISA. How long does it generally take from applying for something like a VLS fund to actually holding units in the fund.

masonic

Gsea said:

Hi all,

With the markets in free fall I want to get ready to jump into a S&S ISA. How long does it generally take from applying for something like a VLS fund to actually holding units in the fund.

If you place the order in the morning, before your chosen platform's cut-off time, then you would buy your units at the valuation point on that day (usually around 12:00), you'd normally get a contract note by the end of the day, or early the next morning.

Gsea

masonic said:

Gsea said:

Hi all,

With the markets in free fall I want to get ready to jump into a S&S ISA. How long does it generally take from applying for something like a VLS fund to actually holding units in the fund.

If you place the order in the morning, before your chosen platform's cut-off time, then you would buy your units at the valuation point on that day (usually around 12:00), you'd normally get a contract note by the end of the day, or early the next morning.

Thanks masonic.