Fixed Rate ISA - Cancel - 14 Day Cooling Off Period, 2022/23 Tax Year Deposit

bristolleedsfan

Spoke to Westbromwich BS who first of all said would need to do it as a ISA transfer to avoid losing 2022/2023 years ISA tax allowance.

I replied surely if cancelled under cooling off period nulifies subscription I made, person went away to find out and said I can login and withdraw the funds myself to nominated account, wont get charged as is within 14 day cooling off period, withdrawal screen confirms get interest for time funds were with them, gives warning will lose Tax Year allowance.

Last night I made telephone appointment to open 5 year ISA Fix with Cumberland BS, earliest available was next Thursday.' No possibility of organising ISA transfer within 14 day cooling off period.

Cooling off period is 14 days from 7th November

Any advice please, possible option maybe is to open instant ISA elsewhere/with Westbromwich BS., transfer it with a view of transferring it again

I would rather transfer funds to nominated account and open new ISA being as cancelled within 14 day cooling off period as if subscription made didnt happen.

eskbanker

My understanding is that West Brom need to process the cancellation themselves, not expect you to do it for them via withdrawal, but their Ts & Cs don't seem to make that clear.

Perhaps a workaround would be to transfer to an easy access product and from there to a fixed one? 

bristolleedsfan

eskbanker said:

My understanding is that West Brom need to process the cancellation themselves, not expect you to do it for them via withdrawal, but their Ts & Cs don't seem to make that clear.

Perhaps a workaround would be to transfer to an easy access product and from there to a fixed one? 

I phoned back they were prepared to process a cancel under 14 day cooling off period, they said would be between me and HMRC  regarding this years allowance, being as she brought up again that I would lose this years tax allowance I didnt feel I could risk them just processing as withdrawal so best if I open instant access ISA with them, transfer fixed rate to it and just lose difference in interest 1.2% and nominated account 2.75% until funds transferred to new fixed rate.

Thanks for reply

t1redmonkey

bristolleedsfan said:

eskbanker said:

My understanding is that West Brom need to process the cancellation themselves, not expect you to do it for them via withdrawal, but their Ts & Cs don't seem to make that clear.

Perhaps a workaround would be to transfer to an easy access product and from there to a fixed one? 

I phoned back they were prepared to process a cancel under 14 day cooling off period, they said would be between me and HMRC  regarding this years allowance, being as she brought up again that I would lose this years tax allowance I didnt feel I could risk them just processing as withdrawal so best if I open instant access ISA with them, transfer fixed rate to it and just lose difference in interest 1.2% and nominated account 2.75% until funds transferred to new fixed rate.

Thanks for reply

I’m sure you’ve checked this already, but are you in their operating area?  Only certain postcodes can apply to their accounts.

bristolleedsfan

t1redmonkey said:

bristolleedsfan said:

eskbanker said:

My understanding is that West Brom need to process the cancellation themselves, not expect you to do it for them via withdrawal, but their Ts & Cs don't seem to make that clear.

Perhaps a workaround would be to transfer to an easy access product and from there to a fixed one? 

I phoned back they were prepared to process a cancel under 14 day cooling off period, they said would be between me and HMRC  regarding this years allowance, being as she brought up again that I would lose this years tax allowance I didnt feel I could risk them just processing as withdrawal so best if I open instant access ISA with them, transfer fixed rate to it and just lose difference in interest 1.2% and nominated account 2.75% until funds transferred to new fixed rate.

Thanks for reply

I’m sure you’ve checked this already, but are you in their operating area?  Only certain postcodes can apply to their accounts.

Yes I am thanks for interest, was lucky that I looked as could not imagine my town being within Cumberland operating area, no branch within my postcode.

For benefit of thread subject, searching different phrase I just came across :

https://forums.moneysavingexpert.com/discussion/comment/11891189/#Comment_11891189

Yes, if your cancellation meets the HMRC criteria - see Paragraph 5.5 et seq of the Acrobat document HERE:

"Strictly investors who withdraw their subscriptions from an ISA by exercising their right to cancel have made a subscription to an ISA. But where the subscription is cancelled within the set period, investors will be treated as though they have not subscribed to an ISA."

masonic

This might be of help: https://forums.moneysavingexpert.com/discussion/6398234/closing-isa-within-14-days-can-i-open-another

bristolleedsfan

masonic said:

This might be of help: https://forums.moneysavingexpert.com/discussion/6398234/closing-isa-within-14-days-can-i-open-another

For benefit of subject this is useful as well, contrast this with lack of definite info from Westbrom BS both in words and in voice telephone calls

https://forums.moneysavingexpert.com/discussion/comment/78197177/#Comment_78197177  - Virgin Money

The T&Cs state that the KPIS have priority over the general T&Cs, and that the KPIS includes the ISA Key Facts. The ISA Key Facts states "If you are not happy with your choice of account within 14 days of making your first deposit, we will help you close your account and you will not lose your right to invest in another Cash ISA for that tax year. If you would like to take advantage of this 14 day rule, you must send your cancellation in writing to Savings Operations, Virgin Money, Jubilee House, Gosforth, Newcastle upon Tyne, NE3 4PL. When you close your account, we will make sure our reports to HM Revenue & Customs reflect the correct position. If you do cancel your account, the full amount of your investment, together with any interest earned, will be returned to you."

bristolleedsfan

I thought it would be prudent to take no action regarding my WestBrom fixed rate ISA until after Cumberland B.S phone call appointment which took place first thing yesterday morning.

Cumberland B.S advisor said same thing as WestBrom advisors best to transfer ISA to them rather than close account and send fresh funds to new ISA.

After phone call I opened WestBrom instant ISA completing transfer form to transfer fixed rate WestBrom ISA to ,,,,,,,, I sent secure message to WestBrom  stating what I had done was cancel fixed rate ISA within 14 day cooling off period, asking that transfer to instant access ISA  effective from last day of cooling off period which is Sunday,

I gave Cumberland B.S new WestBrom ISA account details so that they could put documentation together for 5 year fixed rate ISA + transfer posted to me.

Today I received phone call from WestBrom in response to my secure message insistent that to cancel under 14 day cooling off period had to be done as account cancellation with funds returned to my nominated account not done as ISA transfer and they would send report to HMRC reflecting  ..........

isasmurf

The cooling off right for ISAs is for cancelling a subscription, not for deciding you want to keep the subscription but have it in a different account. Therefore they are, strictly speaking, correct that it should be returned to the account from which it came and then you are free to put the cancelled funds in the ISA you want.

Not sure what they mean by reporting to HMRC. There is no requirement to report any ISA closed using cooling off rights to HMRC. 

bristolleedsfan

isasmurf said:

The cooling off right for ISAs is for cancelling a subscription, not for deciding you want to keep the subscription but have it in a different account. Therefore they are, strictly speaking, correct that it should be returned to the account from which it came and then you are free to put the cancelled funds in the ISA you want.

Not sure what they mean by reporting to HMRC. There is no requirement to report any ISA closed using cooling off rights to HMRC. 

Last week West Brom B,S told me the opposite said i should open instant ISA with them and transfer fixed rate to it then transfer it out,

Virgin Money mention about report sent to HMRC, however last week in a second phone call to West Brom I was told if they cancelled ISA account it would be between myself and HMRC, that they do not get involved with HMRC.

masonic

ISA managers are free to do what they like regarding internal movement between savings products. The ISA is a wrapper and your money can be moved/spread between products internally by the ISA manager providing they decide to allow it. This is what gives rise to 'split-ISA providers'. This would not be a cancellation under cooling off. Cancellation under cooling off rights should leave you in the position you'd have been in if you hadn't applied - i.e. money back in the funding account and no ISA at all. The only time cancellation would result in money being transferred to a different ISA is where the cancelled ISA was funded via transfer from an older ISA.

Seems like the people you have spoken to were confused. There are several possible routes to achieve the end result you desire. If they advise going via the transfer route then the easiest option is to transfer directly from the fixed account if they agree to waive the penalty (this may or may not involve them internally moving or redesignating the account to easy access). If they don't agree to waive the penalty unless you invoke cooling off, then that requires money to be removed from the ISA wrapper and directly subscribed by you to the new ISA (no ISA transfer) - in which case there should have been no talk of transfer options that they do not support.