ISA £20,000 pa limit - how doees it work? 11 October 2022 at 7:14PM in ISAs & tax-free savings 18 replies 673 views

t8769

I get £20,000 pa allowance for tax free savings
This builds up every year.

What if I close one ISA and move the money to my current account, do I lose that allowance from previous years?

If I move directly from one ISA to another ISA do I keep my tax free allowance?

I'd appreciate advice.


Thank you

ColdPensioner

The answer to both questions is yes. 

Let the new provider move the money, not you.

t8769

I see, thanks 

t8769

How do I transfer money from an ISA in one bank, to an ISA in another bank?


Thanks

refluxer

You first need to check that the second ISA provider accepts transfers in and if so, try and find out what their transfer-in process involves.

Note that you may need to pay a penalty if you are transferring out from a Fixed Rate Cash ISA before it has matured. Transferring out from an Easy Access ISA is normally penalty-free.

eskbanker

refluxer said:

Transferring out from an Easy Access ISA is normally penalty-free.

Out of curiosity, are you aware of any institutions/products where this wouldn't be the case?

Albermarle

t8769 said:

How do I transfer money from an ISA in one bank, to an ISA in another bank?


Thanks

If you are unsure about ISA rules then a quick read through this forum would be a good idea. Every question you can think of about ISA's has been asked and answered, probably hundreds of times. 

Beddie

t8769 said:

How do I transfer money from an ISA in one bank, to an ISA in another bank?


Thanks

• Apply for a new ISA at whatever bank you choose
• At some point in the application, it will ask do you want to transfer from another provider
• Say yes, then fill in the relevant details they will ask you
• That's it! The transfer will usually happen within a couple of weeks and you'll hear from both providers to say the transfer has happened.

refluxer

eskbanker said:

refluxer said:

Transferring out from an Easy Access ISA is normally penalty-free.

Out of curiosity, are you aware of any institutions/products where this wouldn't be the case?

Ah, that's just me being cautious and covering my behind... because I know if I was to put 'always penalty-free', sod's law would kick in and the OP would happen to have the only Easy Access ISA in the country (probably with some tiny, obscure building society) where this wasn't the case !

isasmurf

refluxer said:

eskbanker said:

refluxer said:

Transferring out from an Easy Access ISA is normally penalty-free.

Out of curiosity, are you aware of any institutions/products where this wouldn't be the case?

Ah, that's just me being cautious and covering my behind... because I know if I was to put 'always penalty-free', sod's law would kick in and the OP would happen to have the only Easy Access ISA in the country (probably with some tiny, obscure building society) where this wasn't the case !

Coventry's Limited Access ISA applies a 50 day interest penalty from the 7th withdrawal. 

EthicsGradient

"If I move directly from one ISA to another ISA do I keep my tax free allowance?"

You can only contribute to one of each type of ISA in a tax year. That's new contributions, not transfers from ISAs funded in previous years. So once you've paid any new money into a cash ISA in a tax year, that's the only cash ISA you can pay more new money into, during that tax year.

If the providers support it, you could, however, pay the rest of the £20,000 annual allowance into a Stocks and Shares ISA, and then transfer that S&S ISA into a cash ISA. There might be charges for that, however.