S&S LifeStrategy Isa - Transfer Out Vanguard 22 September 2022 at 4:14PM in ISAs & tax-free savings 9 replies 163 views

2stixoftwixes

I am confused about the rules
I know to keep the tax-free status of an ISA it has to be transferred

I have quite a large sum of money in a Vanguard SS Isa, now that interest rates are rising, I'm getting twitchy so would like to transfer it out

Say I wanted to send the money to a Santander Cash ISA

If I sell the shares and have a cash holding in Vanguard is this money still part of the ISA wrapper (and then can be transferred to Santander)
OR
Does it have to be transferred as S&S to Santander, and Vanguard sell them when they get the instructions from Santander?

Thanks

eskbanker

S&S ISAs can be transferred to cash ISAs without losing the tax wrapper status - you can either choose to liquidate your holdings at a time of your choosing or it'll happen as part of the transfer.  As ever, initiate the transfer from the receiving provider.

2stixoftwixes

That's what I thought,   so I could sell them tomorrow and then instruct Santander to transfer them in

eskbanker

Yes, although it's not a good time to be liquidating investments, albeit potentially still worth doing if they no longer fulfil your requirements, to the extent that crystallising losses is the least worst option (or you could be up since buying?).  Switching to cash simply because of interest rate rises doesn't seem much of a rationale, but if it's money you're likely to need in the short to medium term then that would make more sense....

Aldermast

I’m in a vanguard SS ISA too. Also wanting to transfer over to a cash ISA. I may be wrong.  But my reading is that although Vanguard have a ‘general account’ this does not retain the ISA shield if you withdraw to it.  The only way I can see is to get another provider to perform the transfer in (and the inherent risk of the fund being sold on an uncertain date prior to transfer to the cash isa. ) 

MX5huggy

Aldermast said:

I’m in a vanguard SS ISA too. Also wanting to transfer over to a cash ISA. I may be wrong.  But my reading is that although Vanguard have a ‘general account’ this does not retain the ISA shield if you withdraw to it.  The only way I can see is to get another provider to perform the transfer in (and the inherent risk of the fund being sold on an uncertain date prior to transfer to the cash isa. ) 

Just click sell on the investment you want to sell then you have 3 options

transfer to external bank account 

sell to cash to be held within the ISA 

sell to buy a different investment within the ISA (vanguard call this a switch). 

You want number 2. 

Aldermast

fantastic, thank you.

2stixoftwixes

MX5huggy said:

Aldermast said:

I’m in a vanguard SS ISA too. Also wanting to transfer over to a cash ISA. I may be wrong.  But my reading is that although Vanguard have a ‘general account’ this does not retain the ISA shield if you withdraw to it.  The only way I can see is to get another provider to perform the transfer in (and the inherent risk of the fund being sold on an uncertain date prior to transfer to the cash isa. ) 

Just click sell on the investment you want to sell then you have 3 options

transfer to external bank account 

sell to cash to be held within the ISA 

sell to buy a different investment within the ISA (vanguard call this a switch). 

You want number 2. 

I have just cashed in my daughter's ISA  also with Vanguard and these options never appeared.

dunstonh

2stixoftwixes said:

MX5huggy said:

Aldermast said:

I’m in a vanguard SS ISA too. Also wanting to transfer over to a cash ISA. I may be wrong.  But my reading is that although Vanguard have a ‘general account’ this does not retain the ISA shield if you withdraw to it.  The only way I can see is to get another provider to perform the transfer in (and the inherent risk of the fund being sold on an uncertain date prior to transfer to the cash isa. ) 

Just click sell on the investment you want to sell then you have 3 options

transfer to external bank account 

sell to cash to be held within the ISA 

sell to buy a different investment within the ISA (vanguard call this a switch). 

You want number 2. 

I have just cashed in my daughter's ISA  also with Vanguard and these options never appeared.

Did you go straight to withdrawal?  if so, you wouldn't see as many options (no need for switch for example or sell to cash within the ISA)

MX5huggy

Did you manage to sell?