H2B & Cash ISA with Nationwide... Can I transfer?

ET11488

So last tax year (19/20) I opened a Help To Buy ISA with Nationwide, along with a Cash ISA. As there is a loophole with Nationwide classing their ISAs under the same umbrella, I maxed out £3400 in my H2B, and £16600 in my Cash ISA (=£20000). 

Now Nationwide are slashing the interest rate of my Cash ISA. I want to transfer the entire contents of my Cash ISA to another provider who has a better interest rate, while only intending to pay into my H2B ISA this tax year. 

My question is, is this possible? Am I able to open an entirely new Cash ISA account elsewhere now, and only put 'old money' (the funds paid into that account in the previous tax year) whilst continuing to pay in 'fresh money' (money that counts towards my 2020/21 tax year allowance) into an existing H2B ISA?

My concern is that by opening a new account with a new provider, I will be 'subscribing' to that account, meaning I am restricted to ONLY putting money into that account this year. 

Many thanks,

eskbanker

'Subscribing' refers to paying in new money, so transferring prior year money doesn't count as subscribing and can be done independently of what you choose to do with your 2020/21 money.

masonic

If you've not paid any money into your cash ISA in this tax year then you can transfer it elsewhere as previous year subscriptions. You could also transfer your HTB ISA containing any current year subscriptions to another provider and continue to fund this after the transfer. You do not 'subscribe' to an ISA unless you pay new money into it.

ET11488

Riiiight.... so I can move either account to any provider, as so far this tax year I have not paid into either ISA? However as soon as I pay money into one of them, I am tying myself to only pay into that account for the 20/21 tax year?

And I assume if I wanted to transfer an ISA balance without adding to it, I would need to find a provider that doesn't require a minimum opening amount? Or would this be covered by the 'old money' transfer?

Thanks for your help both 

masonic

ET11488 said:

Riiiight.... so I can move either account to any provider, as so far this tax year I have not paid into either ISA? However as soon as I pay money into one of them, I am tying myself to only pay into that account for the 20/21 tax year?

Paying into one of the ISAs won't prevent you from transferring it, but it will prevent you from paying into the other if you intend to transfer either ISA.

sharpinf

ET11488 said:

And I assume if I wanted to transfer an ISA balance without adding to it, I would need to find a provider that doesn't require a minimum opening amount? Or would this be covered by the 'old money' transfer?

I had this question previously (also in your situation had H2B and Cash ISA with Nationwide) - both Aldermore and Shawbrook (who have £1000 "minimum account opening balance") confirmed to me that transfers in count to this. I think generally that is the policy but can be worth double checking once you've got a provider in mind.