isa transfer will this work? 18 March at 2:23PM in ISAs & tax-free savings 3 replies 197 views

kev1744

hi all
hoping i can get some clarification.
i currentley have a cash isa with virgin at 3.0% this has just over 20k in it.
ive opened a fixed rate isa with virgin at 4.25% in readiness for next tax year.

could i transfer the current funds from cash isa to the new isa before tax deadline and then add another 20k after the deadline?
and then could i put 20k fresh money into the 3.0% isa before the deadline to maximise my tax free savings?

in essence i would then have 40k in the 2023/24 tax year isa and still have 20k in the 2022/23 tax year isa

masonic

If you haven't paid in any of the £20k held your 3% ISA during this tax year, then it would be fine. However, it would be simpler just to add all of the new money to the 4.25% ISA, £20k during the remainder of this tax year and £20k during the following tax year.

If you have paid money into the 3% ISA during this tax year, then after the transfer out, the 4.25% ISA becomes your valid cash ISA for 2022/23 and paying into your 3% ISA would breach both the annual allowance and number of cash ISAs holding current year subscriptions. Virgin should prevent you from doing this, but if they don't, expect some communication from HMRC eventually.

kev1744

ah thanks, unfortunately i have paid into the 3% one this year, so i guess ill just leave that one running and put new cash into the 4.25 % one in the new tax year

Albermarle

i currentley have a cash isa with virgin at 3.0% this has just over 20k in it.
ive opened a fixed rate isa with virgin

A fixed rate ISA is also a cash isa. Presume the 3% one is actually an easy access cash ISA.
Best to use the correct terms as it avoids confusion.