Cancelling new ISA - want to switch to better rate now advertised on MSE!

Psyduck1980

Apologies for hijacking the thread but can anyone tell me if I can open multiple stocks and shares ISAs in the same tax year (to take advantage of joining incentives) if the amount I invest in total is less than £20,000?

masonic

Psyduck1980 said:

Apologies for hijacking the thread but can anyone tell me if I can open multiple stocks and shares ISAs in the same tax year (to take advantage of joining incentives) if the amount I invest in total is less than £20,000?

You can open multiple, but you'd only be able to add money to one per tax year. It's usually better to go for a GIA when bagging incentives.

jungleboy123

refluxer said:

jungleboy123 said:

refluxer said:

If you're set on cancelling the Shawbrook ISAs, then obviously the £1 will be returned to you but you would definitely need to check what happens with the transfers that have already been processed, as presumably the originating Santander ISAs will have been closed so things could get very awkward.

yep. its going to be complex. Tomorrow's the 14 day cut off.

I would have thought the chances of you getting everything clarified by tomorrow so you know exactly where you stand are fairly slim, in which case it might not be worth the risk of losing the ISA wrapper from the transferred funds ?

If the Santander ISAs are still around on 6th April, you'd be able to fund one with next year's ISA allowance. It may even be possible to open one sooner than that and fund it on 6th April, if their funding window and T&Cs allow it (sometimes you have to fund with a minimum of £1 or request a transfer at the time of application, in which case that wouldn't be possible)

There's also a small rate rise predicted for tomorrow's BoE meeting, in which case rates could continue to rise as they have been doing steadily recently, following the peak at the end of last year and subsequent drop at the start of this year.

I just thought of something. What if i switch it to an easy access Shawbrook ISA, deposit what i can now (to use up this years allowance). Open the Santander Isa after 6 April, then request a transfer?

Being easy access should let me do the full transfer and keep the isa limit for new tax year right?

Gosh this stuff is so complicated! I watch the MSE show and can only thank the audience being on the same/slightly higher level as me.

masonic

jungleboy123 said:

refluxer said:

jungleboy123 said:

refluxer said:

If you're set on cancelling the Shawbrook ISAs, then obviously the £1 will be returned to you but you would definitely need to check what happens with the transfers that have already been processed, as presumably the originating Santander ISAs will have been closed so things could get very awkward.

yep. its going to be complex. Tomorrow's the 14 day cut off.

I would have thought the chances of you getting everything clarified by tomorrow so you know exactly where you stand are fairly slim, in which case it might not be worth the risk of losing the ISA wrapper from the transferred funds ?

If the Santander ISAs are still around on 6th April, you'd be able to fund one with next year's ISA allowance. It may even be possible to open one sooner than that and fund it on 6th April, if their funding window and T&Cs allow it (sometimes you have to fund with a minimum of £1 or request a transfer at the time of application, in which case that wouldn't be possible)

There's also a small rate rise predicted for tomorrow's BoE meeting, in which case rates could continue to rise as they have been doing steadily recently, following the peak at the end of last year and subsequent drop at the start of this year.

I just thought of something. What if i switch it to an easy access Shawbrook ISA, deposit what i can now (to use up this years allowance). Open the Santander Isa after 6 April, then request a transfer?

Being easy access should let me take it out right?

That wouldn't be a cancellation under clause 14.1, so you'd be relying on Shawbrook's good will to allow you to do that. No harm in trying I suppose, but the cancellation would allow you to immediately open and fund the Santander ISA, even if it takes Shawbrook 30 days to spit out your quid.

Edit: I suppose even if they made you pay the interest penalty, it would only be pennies on a £1 balance

jungleboy123

masonic said:

jungleboy123 said:

refluxer said:

jungleboy123 said:

refluxer said:

If you're set on cancelling the Shawbrook ISAs, then obviously the £1 will be returned to you but you would definitely need to check what happens with the transfers that have already been processed, as presumably the originating Santander ISAs will have been closed so things could get very awkward.

yep. its going to be complex. Tomorrow's the 14 day cut off.

I would have thought the chances of you getting everything clarified by tomorrow so you know exactly where you stand are fairly slim, in which case it might not be worth the risk of losing the ISA wrapper from the transferred funds ?

If the Santander ISAs are still around on 6th April, you'd be able to fund one with next year's ISA allowance. It may even be possible to open one sooner than that and fund it on 6th April, if their funding window and T&Cs allow it (sometimes you have to fund with a minimum of £1 or request a transfer at the time of application, in which case that wouldn't be possible)

There's also a small rate rise predicted for tomorrow's BoE meeting, in which case rates could continue to rise as they have been doing steadily recently, following the peak at the end of last year and subsequent drop at the start of this year.

I just thought of something. What if i switch it to an easy access Shawbrook ISA, deposit what i can now (to use up this years allowance). Open the Santander Isa after 6 April, then request a transfer?

Being easy access should let me take it out right?

That wouldn't be a cancellation under clause 14.1, so you'd be relying on Shawbrook's good will to allow you to do that. No harm in trying I suppose, but the cancellation would allow you to immediately open and fund the Santander ISA, even if it takes Shawbrook 30 days to spit out your quid.

Edit: I suppose even if they made you pay the interest penalty, it would only be pennies on a £1 balance

Well, wouldn't it be also including interest on the balance that was transferred from the previous ISA?

masonic

jungleboy123 said:

masonic said:

jungleboy123 said:

refluxer said:

jungleboy123 said:

refluxer said:

If you're set on cancelling the Shawbrook ISAs, then obviously the £1 will be returned to you but you would definitely need to check what happens with the transfers that have already been processed, as presumably the originating Santander ISAs will have been closed so things could get very awkward.

yep. its going to be complex. Tomorrow's the 14 day cut off.

I would have thought the chances of you getting everything clarified by tomorrow so you know exactly where you stand are fairly slim, in which case it might not be worth the risk of losing the ISA wrapper from the transferred funds ?

If the Santander ISAs are still around on 6th April, you'd be able to fund one with next year's ISA allowance. It may even be possible to open one sooner than that and fund it on 6th April, if their funding window and T&Cs allow it (sometimes you have to fund with a minimum of £1 or request a transfer at the time of application, in which case that wouldn't be possible)

There's also a small rate rise predicted for tomorrow's BoE meeting, in which case rates could continue to rise as they have been doing steadily recently, following the peak at the end of last year and subsequent drop at the start of this year.

I just thought of something. What if i switch it to an easy access Shawbrook ISA, deposit what i can now (to use up this years allowance). Open the Santander Isa after 6 April, then request a transfer?

Being easy access should let me take it out right?

That wouldn't be a cancellation under clause 14.1, so you'd be relying on Shawbrook's good will to allow you to do that. No harm in trying I suppose, but the cancellation would allow you to immediately open and fund the Santander ISA, even if it takes Shawbrook 30 days to spit out your quid.

Edit: I suppose even if they made you pay the interest penalty, it would only be pennies on a £1 balance

Well, wouldn't it be also including interest on the balance that was transferred from the previous ISA?

Ah, I missed that you'd already completed transfers of some old Santander ISAs. The penalty would be on the whole balance, so taking the hit would not be advisable!

Typically a provider would allow you to transfer out an ISA if it contained previous year subscriptions and was cancelled within 14 days.

Money_Grabber13579

Noddy question perhaps from me…if that £1 were to be withdrawn again by the OP, would they still be viewed as having funded that ISA in the current tax year or would the withdrawal cancel out the original deposit, such that they could then open the ISA they want?

If that works, might solve the problem for current year subscriptions although not for the prior year transfers.

masonic

Money_Grabber13579 said:

Noddy question perhaps from me…if that £1 were to be withdrawn again by the OP, would they still be viewed as having funded that ISA in the current tax year or would the withdrawal cancel out the original deposit, such that they could then open the ISA they want?

If that works, might solve the problem for current year subscriptions although not for the prior year transfers.

It would only work for a flexible ISA. Fixed ISAs are rarely if ever flexible. There is nothing to stop them opening the ISA they want even with the £1 in the Shawbrook ISA. It would just need to be funded via transfer in the first instance.

Johnjdc

jungleboy123 said:

refluxer said:

jungleboy123 said:

Thanks. Seems like a nightmare effort for a few bob... We've deposited £1 into each accounts, some of the transfers from Santander have already been done. Not sure if that affects things.

Are the Shawbrook ISAs the only cash ISAs you've each paid into during the current tax year ? So you've only made use of £1 from your 2022-2023 ISA allowance ?

yep just the £1 test deposit. everything else is from an isa transfer request from older tax years.

It seems it depends what the speed of returning the money is and what they mean by "returned to you".

If you cancel the ISA do they send you cash or do they send most of the cash back to the ISA you transferred out of, and just the £1 back to your current account?

If so, you can then open a new ISA, but the risk is they're too slow and you miss the tax year cut-off.

In which case is the solution is that if it hasn't happened by the deadline day, you open a Stocks and Shares ISA for £19,999 and invest it in nothing, so you don't lose the allowance, then transfer that to an ISA of your choice?

Or is the risk that by the time all this has played out, fixed rates may have moved down again?

jungleboy123

Thanks everyone for the advice.

Today was the cut off and it looks like all our isa transfers went through.

I'll have to stick with Shawbrook and hope that there isn't significant increases in the ISA rates going forward. BoE just put up rates to 4.25% today.

Annoyingly easy access is/has always been lower than BoE rates and they dont seem to bother moving above!