Transferring and opening multiple ISAs - confused

tom98765

Have been trying to read around to confirm if I can do what I hope to do with ISAs, but can't quite get my head round it and wanted to check.
Am aware that HMRC doesn't consider the transfer of old funds as 'paying in', meaning you can open as many ISAs as you like, as long as you only pay new money in to one of each type of ISA per tax year. However, wasn't quite sure how this combines with transfer rules so wanted to ask if the following example is allowed:
Current situation:

• I have £10,000 in Cash ISA 'A', all paid in during 19/20 tax year. 
• I have £1,000 in Cash Lifetime ISA 'B', all paid in during 19/20 tax year. 

Transfers, to be made in the current tax year 20/21, let's say tomorrow:

• I want to transfer £2,000 of the old money from Cash ISA 'A' to the existing Cash Lifetime ISA 'B'. 
• I want to also transfer £2,000 of the old money from Cash ISA 'A' to a new Stocks & Shares Lifetime ISA 'C' for 20/21.
• I want to also transfer £2,000 of the old money from Cash ISA 'A' to a new Stocks & Shares ISA 'D' (not Lifetime, just S&S) for 20/21.
• I finally want to pay in £2,000 of new money into Stocks & Shares ISA 'D'. 

I believe that should be OK because:
a) Old money from previous years' ISAs can be partially transferred
b) I would be transferring into two different LISAs in the same year (one new, one old) - but would not be paying new money into more than one (or any, in fact)
c) I would be opening and paying new money into just one new S&S ISA.
Hope that makes sense and thanks for any help!

Alexland

Looks ok to me although it is very unusual to be splitting between both a Cash and S&S LISA. I also don't understand why you didn't add a further £3k into the LISA last tax year if you had it available. Your plan will mean you can put no more money into your LISAs this tax year but you would still have £18k of ISA allowance remaining. Your poor Cash ISA manager will be busy - assume they support partial transfers out?

tom98765

Looks ok to me 

Thanks for confirming!

it is very unusual to be splitting between both a Cash and S&S LISA

Fair enough - could you explain this? My way of seeing it was I wanted to do S&S but the Cash LISA spread the risk a little.

don't understand why you didn't add a further £3k into the LISA last tax year if you had it available. Your plan will mean you can put no more money into your LISAs this tax year 

Left the LISA late in the tax year (typical mistake) and couldn't withdraw/transfer my Cash ISA savings in time, so could only add the £1k I had in current account. Regardless, I don't plan to commit the full £4k every year over the next several years to LISA anyway due to chance I might not buy house in UK (dual nationality). Small chance but worth managing the risk. Happy with £5k out of a possible £8k over 2 years. 

you would still have £18k of ISA allowance remaining.

Plenty for me.

Your poor Cash ISA manager will be busy - assume they support partial transfers out?

Will double check this thanks

 

Alexland

tom98765 said:

it is very unusual to be splitting between both a Cash and S&S LISA

Fair enough - could you explain this? My way of seeing it was I wanted to do S&S but the Cash LISA spread the risk a little.

Well most people would either use a Cash LISA to save for a qualifying property purchase or a S&S LISA to invest for retirement in 20+ years time.

S&S investments are only suitable for periods of at least 5 years preferably longer (to reduce the chance of withdrawing less than contributed) so it's fairly unusual for S&S LISAs to be used for a property purchase unless it's going to be longer than 5 years away. Similarly for most people investing for retirement they would control the S&S volatility using a mixed asset portfolio (equites and bonds) rather than a separate Cash LISA.

tom98765 said:

you would still have £18k of ISA allowance remaining.

Plenty for me.

In which case if you don't intend to use your full allowance this tax year then wouldn't it be easier to reduce the number of transfers from 3 down to 1 and just withdraw £4k from the Cash ISA to add £2k to each of the S&S ISA and S&S LISA and then you would only need to do an ISA transfer of £2k from the Cash ISA into the Cash LISA? So after your extra £2k contribution to the S&S ISA you would have £14k allowance remaining.