Partial transfers from Cash ISA to Vanguard S&S ISA in future tax years (or vice versa) - confused!

sarah748

It is coming to the end of the tax year and I have only used 2K of my 20K ISA allowance so far this year. This money so far has been paid in to a Vanguard S&S ISA in the 20/21 tax year.

I would like to deposit more into an (as yet undecided) ISA before the tax year is over, to use up the allowance, and I’m generally more interested in S&S ISAs than Cash ISAs, but I am a) not sure if/where I want to invest the remaining 18K right now, and won't be before April and b) confused about partial transfers work from wherever I put my money in in future tax years. It seems more difficult than I expected to transfer partial funds from a Cash ISA to a Vanguard ISA or vice versa.

Ideally what I would want to do is this: Put my remaining 18K in a new Cash ISA this tax year before it is over, therefore using my full 20K tax-free allowance. Then, as and when I decide what to do with it, in future tax years, transfer the money partially out to whichever ISAs I decide (within rules). So my questions are this:

1. If I put the 18K in a Cash ISA, would I then be able to transfer, say, only 9K from that ISA, into Vanguard ISA as cash, at a later date?
2. If I put the 18K as cash holdings into my Vanguard ISA, would I then be able to transfer, say, 9K from those cash holdings, to another cash or S&S ISA in the future? I may not want to have it in Vanguard forever, but still keep the tax-free status.

I checked out the Vanguard transfer form and it says this:

I take that to mean, with Vanguard at least, I can’t do a partial cash transfer from a Cash ISA (ie. my example 1) to Vanguard? Only a partial S&S transfer of Vanguard holdings? Why can't I transfer cash?

I understand that all ISA transfers need to be done by the correct/official methods and not just withdrawing/depositing the money, otherwise their tax-free status will be lost. I’m asking what’s possible in transferring PARTIALLY from a Cash to S&S ISA or vice versa? Are there limits, is it up to the provider? I kind of assumed, as long as you did official transfers and stayed within limits, it was possible to do as many partial transfers as you want, between any types of ISAs you wanted, but maybe this is not the case?

FatherTireseus

You can do a partial transfer of previous years ISAs (I've just split one larger, older cash ISA between two different cash ISA providers).  But if it's the current year's ISA allowance you can only transfer that in full.  But if you're planning to transfer in subsequent years that won't be an issue if you want to split your 20/21 contribution.

For ISA transfers, you choose your NEW ISA provider and ask them to transfer in from your existing ISA provider.   So the screenshot you have included looks like Vanguard's form to transfer an ISA with someone else, in to them. They won't have a transfer out form because it doesn't work like that. 

The answer both of your questions as far as I'm aware is yes: you could transfer £9k from a previous year's cash ISA to Vanguard, providing it was an instant access ISA of course, not a fixed rate one where you can'taccess the moneyuntil maturity.  And I don't see why you couldn't transfer £9k out of a Vanguard ISA to another ISA in the future, but I have never done a partial transfer of a stocks and shares ISA so others may know better.

Vanguard aren't paying any interest on cash holdings in a stocks and shares ISA as far as I'm aware, so if it was me, I'd be tempted to find an instant access cash ISA as a home for my money to retain the ISA benefits, as you're aware; and then think from April onwards about how I wanted to invest it. 

sarah748

FatherTireseus said:

So the screenshot you have included looks like Vanguard's form to transfer an ISA with someone else, in to them. They won't have a transfer out form because it doesn't work like that. 

Thanks for your response, reassuring. Yes, it is the form to transfer an ISA with someone else in to them, but the small print on selecting Partial transfer is what confused me: "Any non Vanguard funds or cash that you hold with your current provider will not be transferred over". So there doesn't seem to be a way to partial transfer cash from an ISA with someone else, to Vanguard. And thanks for your advice too! I think I will do what you suggested re: a cash ISA.

xylophone

https://www.vanguardinvestor.co.uk/need-help/answer/can-i-transfer-existing-isas-and-junior-isas-to-vanguard

Which types of accounts can I transfer to Vanguard?

We accept the following transfers:

• Stocks and Shares ISAs
• Cash ISAs (to our Stocks and Shares ISA)
• Junior ISAs
• General Accounts (we only accept the transfer of Vanguard funds from other providers. If you have other investments in your existing account, you’ll need to sell these first so they can be transferred to us as cash)
• Pensions (for more information about which pension types you can transfer to us, see our pension transfer page

Aceace

You can definitely do partial transfers from Vanguard as I have done this (mine was to an IFISA, but you could also do a partial transfer out to a Cash ISA or a S&S ISA as it would be controlled by the receiving platform).

I don't think Vanguard accept partial transfers in (at least they didn't when I tried to do one about 3 years ago, the whole S&S ISA got transfered). When you tick the 'partial' box there is nowhere to specify the amount. I think they assume that a partial transfer is a transfer of Vanguard holdings on another platform to Vanguard (and not your other holdings on that platform). You could get round this by doing a partial transfer to a new cash ISA and then a transfer of that new cash ISA to Vanguard, though thats obviously a bit of a faff.

Vanguard's transfering in process is very poorly explained on their site IMO.

easterbunni

Well I've put my spare allowance into a Halifax cash ISA a) to not lose the allowance and b) didn't want to invest it all yet when I might use it for something else. Was planning to move it to VG S&S ISA after April 6th (but then I could move it to my Halifax S&S ISA instead) so same as OP really. I will let you know how I get on!

sarah748

easterbunni said:

Well I've put my spare allowance into a Halifax cash ISA a) to not lose the allowance and b) didn't want to invest it all yet when I might use it for something else. Was planning to move it to VG S&S ISA after April 6th (but then I could move it to my Halifax S&S ISA instead) so same as OP really. I will let you know how I get on!

Hi, I emailed Vanguard support about this and here is the answer I got:

Thanks for your message and interest in transfers.
Regarding both transfers in and out of Vanguard, please note that we can't facilitate partial transfers of cash so would be unable to accommodate your requests.
Essentially when making an ISA transfer to Vanguard you have the following options available.
1. Full transfer of all current tax year contributions (2020/21)
2. Full transfer of all previous tax years contributions (everything before 2020/21)
3. Full transfer of all current tax year contributions (2020/21) and all previous tax years contributions (everything before 2020/21)
4. Partial transfer of Vanguard held funds only (Only available to Stocks and Shares ISA)
If you already hold Vanguard funds, then they will be transferred over as they are. Any non-Vanguard funds will need to be first sold down to cash by your existing provider before being transferred.
To initiate a transfer to Vanguard please click on the Transfer button on our website, www.vanguardinvestor.co.uk. You simply need your contact details, national insurance number and policy number at your current platform provider.

So it seems like only a full Cash ISA transfer is possible. Bit disappointing really as means you have to be pretty certain what you want to do with your money! Makes me think I might open a different S&S ISA next tax year that is more flexible with partial transfers.

masonic

Or do a partial transfer of the money you want at Vanguard to a different cash ISA, followed by a full transfer of that new ISA to Vanguard.

sarah748

masonic said:

Or do a partial transfer of the money you want at Vanguard to a different cash ISA, followed by a full transfer of that new ISA to Vanguard.

I like your thinking, but you are only able to open one cash ISA per tax year, aren't you, which complicates that method slightly?
I suppose I could partial transfer between an old cash ISA from a previous tax year, and a new cash ISA, and leave only the money I want to transfer to Vanguard in that cash ISA, then transfer it all... hmm, food for thought. Thank you!

Aceace

Despite what they say, you can do partial transfers of cash out of Vanguard. I've done it. 

Aceace

sarah748 said:

masonic said:

Or do a partial transfer of the money you want at Vanguard to a different cash ISA, followed by a full transfer of that new ISA to Vanguard.

I like your thinking, but you are only able to open one cash ISA per tax year, aren't you, which complicates that method slightly?
I suppose I could partial transfer between an old cash ISA from a previous tax year, and a new cash ISA, and leave only the money I want to transfer to Vanguard in that cash ISA, then transfer it all... hmm, food for thought. Thank you!

You can open as many cash ISAs as you like per year, and transfer past year ISA funds to them in any proportion (as long as the ISA manager allows partial transfers). You just can't pay new cash into more than 1.