Confused about ISA rule

masonic

johnthorpe3 said:

I am in dispute at the moment with my existing ISA provider and HMRC. I tried to transfer my existing funds to a new provider  using the provider's web pages, and unfortunately they withdrew the funds and paid them into my current account. They say that it is my error and is "irreversible". HMRC have agreed with them. I am adamant that I had no intention of withdrawing my funds, which are considerable, and which I transferred to them last year without any problems. My choice of provider being taken from Martin's lists on each occasion. I have referred my problem to the Financial Ombudsman but they are knee deep in other more pressing problems for the foreseeable future. As things stand, I am losing the ISA shelter for my funds which have been built up over many years. Does anyone have ideas as to how I can proceed ? I need to do something positive before 5th April if possible.
Thanks John.

Perhaps you could explain the exact steps you followed to initiate the transfer. I can't imagine any way in which filling out a web form at Provider B's website could result in Provider A moving your ISA funds to your current account. Do you hold your current account with Provider B or Provider A?

missymouse

*Badger* yes that would have been good except my cash one won’t let me add anymore 
I believe I can add money to my current S&S isa without it being invested but I’m still unsure & nervous about the whole thing.

maybe it’s nit for me. I’m too risk adverse😊

badger09

missymouse said:

*Badger* yes that would have been good except my cash one won’t let me add anymore 
I believe I can add money to my current S&S isa without it being invested but I’m still unsure & nervous about the whole thing.

maybe it’s nit for me. I’m too risk adverse😊

Why won't your cash ISA provider let you add any more money?

johnthorpe3

masonic said:

johnthorpe3 said:

I am in dispute at the moment with my existing ISA provider and HMRC. I tried to transfer my existing funds to a new provider  using the provider's web pages, and unfortunately they withdrew the funds and paid them into my current account. They say that it is my error and is "irreversible". HMRC have agreed with them. I am adamant that I had no intention of withdrawing my funds, which are considerable, and which I transferred to them last year without any problems. My choice of provider being taken from Martin's lists on each occasion. I have referred my problem to the Financial Ombudsman but they are knee deep in other more pressing problems for the foreseeable future. As things stand, I am losing the ISA shelter for my funds which have been built up over many years. Does anyone have ideas as to how I can proceed ? I need to do something positive before 5th April if possible.
Thanks John.

Perhaps you could explain the exact steps you followed to initiate the transfer. I can't imagine any way in which filling out a web form at Provider B's website could result in Provider A moving your ISA funds to your current account. Do you hold your current account with Provider B or Provider A?

I might have submitted unclear details. Provider A  closed my ISA and paid the money into my Current Bank account, the details that they had on file for this account was from when I first transferred to them in December 2018. Provider B should, as I understand it do the transfer work, but due to my giving mistaken instructions to provider A, my account was empty by then and in transit to my bank. I have stated that their online form must have been unclear, that there was no warning, "Is this what you want to do". ? because I would be losing my ISA wrapper, and also there was no cooling off period. I have looked at the HMRC ISA conditions which are complicated, but it appears that both fund managers can make mistakes and corrections made, but not the investor. It is still ongoing but I seem to be between a rock and a hard place.

eskbanker

johnthorpe3 said:
I might have submitted unclear details. Provider A  closed my ISA and paid the money into my Current Bank account, the details that they had on file for this account was from when I first transferred to them in December 2018. Provider B should, as I understand it do the transfer work, but due to my giving mistaken instructions to provider A, my account was empty by then and in transit to my bank. I have stated that their online form must have been unclear, that there was no warning, "Is this what you want to do". ? because I would be losing my ISA wrapper, and also there was no cooling off period. I have looked at the HMRC ISA conditions which are complicated, but it appears that both fund managers can make mistakes and corrections made, but not the investor. It is still ongoing but I seem to be between a rock and a hard place.

The correct method to transfer an ISA from provider A to provider B, as explained by masonic, is to ask B to initiate the transfer, as A can't do this and their website won't suggest they can.  Once you've instructed A to withdraw the funds to your bank, this is indeed irreversible*, so the money has lost its ISA status and none of A, B, HMRC or FOS can change this.  You can complain to A about lack of warnings on their website, and if they agree then they may offer some sort of compensation, but that can't and won't extend to reinstating ISA status for the money....

* unless the ISA is flexible, in which case you can simply pay it all back in again, but provider A should already have suggested this if it was possible for you.

masonic

johnthorpe3 said:

masonic said:

johnthorpe3 said:

I am in dispute at the moment with my existing ISA provider and HMRC. I tried to transfer my existing funds to a new provider  using the provider's web pages, and unfortunately they withdrew the funds and paid them into my current account. They say that it is my error and is "irreversible". HMRC have agreed with them. I am adamant that I had no intention of withdrawing my funds, which are considerable, and which I transferred to them last year without any problems. My choice of provider being taken from Martin's lists on each occasion. I have referred my problem to the Financial Ombudsman but they are knee deep in other more pressing problems for the foreseeable future. As things stand, I am losing the ISA shelter for my funds which have been built up over many years. Does anyone have ideas as to how I can proceed ? I need to do something positive before 5th April if possible.
Thanks John.

Perhaps you could explain the exact steps you followed to initiate the transfer. I can't imagine any way in which filling out a web form at Provider B's website could result in Provider A moving your ISA funds to your current account. Do you hold your current account with Provider B or Provider A?

I might have submitted unclear details. Provider A  closed my ISA and paid the money into my Current Bank account, the details that they had on file for this account was from when I first transferred to them in December 2018. Provider B should, as I understand it do the transfer work, but due to my giving mistaken instructions to provider A, my account was empty by then and in transit to my bank. I have stated that their online form must have been unclear, that there was no warning, "Is this what you want to do". ? because I would be losing my ISA wrapper, and also there was no cooling off period. I have looked at the HMRC ISA conditions which are complicated, but it appears that both fund managers can make mistakes and corrections made, but not the investor. It is still ongoing but I seem to be between a rock and a hard place.

As per eskbanker's response above, whatever form you filled out was not for a transfer to Provider B because no such form will exist on Provider A's website. It seems reasonable to request a copy of the form you filled out from Provider A if you don't have this. If you could share more details of this, someone might be able to comment on whether your FOS complaint is likely to be upheld - based on the information you've provided so far I don't think it will.

There is no cooling off period for a withdrawal because a withdrawal does not constitute a sale and no new accounts were opened at Provider A. It is unlikely that a cooling off period would allow you to replace funds into your ISA had they been transferred to a new current or savings account rather than your existing one.

It's not true that investors aren't let off errors, in fact a "self transfer" error is explicitly permitted in the ISA rules. So one option open to you, if your ISA isn't flexible, is to push forward with the self transfer, albeit you'll only be able to pay up to £20k into Provider B's ISA in this tax year.

missymouse

Apparently I can put a lump sum in my S&S isa without investing it. Could this then be transferred next tax year to another S&S isa or even a cash ISA to not lose the allowance 

eskbanker

missymouse said:

Apparently I can put a lump sum in my S&S isa without investing it. Could this then be transferred next tax year to another S&S isa or even a cash ISA to not lose the allowance 

Yes.

Alexland

Although if you are actually using your S&S ISA to hold investments you might want to check they support a partial transfer out of just some cash balance. Some would require you to transfer out the whole S&S ISA.

missymouse

yes I think that may be the case. I wanted to leave the investment in place and move out the cash but they are saying I cannot do a partial transfer. I don’t really understand why not as it’s money for the new company and there is no phone contact available at the moment.

i feel like tipping the cash into my original investment. I don’t really want it to sit there doing nothing but we are now in a new tax  year and you can’t have 2 funds at the same time.

I suppose I could wait till my other investment picks up and transfer it all across. Very frustrating