ISA Transfer Help (Subscribed in the Current Financial Year)

OddTwo

I have made subscriptions in the current financial year to both CASH ISA with provider A and S&S ISA with provider B. Two questions:
 1.   Would I violate the HMRC's ISA rule if I were to (request to) transfer my current year CASH ISA subscription with provider A to a S&S ISA with provider C in full? Would this be allowed because the CASH ISA was how some of my money was deposited to? 
 2.   Effectively if this is allowed, I could have made subscriptions to 2 different S&S providers (both B and C) in the same financial year. I suspect if this is the case, the potential downside is that I may not be able to subscribe to any other CASH ISA throughout this financial year?

I could not quite find this question on the Internet. Help please......

eskbanker

The basic rules are that all current year subscriptions to each ISA type must be kept together and that transfers create the effect of having originally contributed to the new account, so you can't have current year money in two different S&S ISAs and the answers to q1 are yes and no respectively, making q2 moot.

Surely you can't have already contributed new money to two different ISAs while looking to populate a third, all within a week of the new year starting?!

Alexland

eskbanker said:

Surely you can't have already contributed new money to two different ISAs while looking to populate a third, all within a week of the new year starting?!

Some of us can't resist a new account application form with lots of new buttons to click!

OddTwo

eskbanker said:

Surely you can't have already contributed new money to two different ISAs while looking to populate a third, all within a week of the new year starting?!

I was doing some work in how my S&S ISA is set up, i.e. using different S&S providers to minimise the annual platform fee while not changing my portfolio itself, i.e. funds (0.15% for Vanguard) and ETFs (platform fee is capped at £7.50 per quarter in AJ Bell) are charged differently. iWeb charges 0% for holding any types of investments (funds, shares or ETFs).  However its ISA offered choices are more limited than AJ Bell. I guess I need to play with my previous year subscriptions in terms of ISA transfers. Thank you eskbanker

Just out of interests, is there any other good platforms i.e. cheap to HOLD investments, that I am not aware of? Overall, I am more concerned about platform fees than transactions charges because I am more of a long term investor so I trade infrequently, maybe 2-3 dealings (2-3 sells and 2-3 buys) per year not including of regular investments.

Alexland said:

eskbanker said:

Surely you can't have already contributed new money to two different ISAs while looking to populate a third, all within a week of the new year starting?!

Some of us can't resist a new account application form with lots of new buttons to click!

You got me there, fair point!

Alexland

Our strategy is to use iWeb for previous tax year contributions and go with a percentage based platform during the current tax year for no trade costs and signup incentives which more than cover all costs incurred during the minimum term.

This tax year we went with L&G for the £100+ topcashback and invested in their International Trust retail class which we can later inspecie transfer to iWeb but will then cost 2x£5 to switch into our cheaper iWeb HSBC fund.

OddTwo

Alexland said:

Our strategy is to use iWeb for previous tax year contributions and go with a percentage based platform during the current tax year for no trade costs and signup incentives which more than cover all costs incurred during the minimum term.

This tax year we went with L&G for the £100+ topcashback and invested in their International Trust retail class which we can later inspecie transfer to iWeb but will then cost 2x£5 to switch into our cheaper iWeb HSBC fund.

Using iWeb to hold all previous year subscriptions is such a wise idea! 

Cashback is probably the next thing I could research into. I have mostly been spending most of my time and efforts thinking about what portfolio is suitable to my style and risk appetite, ratio of cash&bonds to equity, etc.

Given that I could not do the trick I initially thought of, I am now thinking about just transfer my current year subscription S&S ISA with provider B in full to S&S ISA provider C. One nitty-gritty question:
When could I pay into the S&S ISA with provider C? Do I have to wait until the ISA transfer is completed or could I make payments as soon as I submitted the ISA transfer form to provider C? It does not matter too much if I have to wait for the transfer to come through, up to 30 days or more due to the delays caused by the COVID-19...

masonic

OddTwo said:

Given that I could not do the trick I initially thought of, I am now thinking about just transfer my current year subscription S&S ISA with provider B in full to S&S ISA provider C. One nitty-gritty question:
When could I pay into the S&S ISA with provider C? Do I have to wait until the ISA transfer is completed or could I make payments as soon as I submitted the ISA transfer form to provider C? It does not matter too much if I have to wait for the transfer to come through, up to 30 days or more due to the delays caused by the COVID-19...

Are you intending to transfer in specie (transfer investments bought with this years allowance without selling them), or transfer as cash? If the former, then it could take 30 days or more under normal circumstances, with delays caused by Covid-19 it could be several months.

As to when you could add more money, you could pay what you can into S&S ISA provider B just before you initiate the transfer. When you can safely subscribe to the S&S ISA held at provider C would be a question for provider C, but there is no reason why they could not accept subscriptions once provider B has accepted the transfer instruction and confirmed the amount of current year subscriptions being transferred.

OddTwo

Thank you for your reply, masonic. For the full transfer from S&S ISA provider B to C, I intend to transfer in specie (without turning them into cash) with the rational of while the transfer is in the process (30 days or more whatever), I don't intend to touch (buy/sell) the soon-to-be transfers funds/ETFs and only ever consider selling them in a long time, 10 years+ most likely; I would like to keep these investments in the market (I understand that currently this market is in a very interesting state), instead of liquidating into cash and out of the market for up to 15 days. As bad as this bear market is, I would rather take the pain on paper even if it continues to drop and not miss the opportunities of any bounces, meaningful scales or not.

masonic said:

As to when you could add more money, you could pay what you can into S&S ISA provider B just before you initiate the transfer. When you can safely subscribe to the S&S ISA held at provider C would be a question for provider C, but there is no reason why they could not accept subscriptions once provider B has accepted the transfer instruction and confirmed the amount of current year subscriptions being transferred.

Thank you for this! I will ask my provider C about this question in details