Cash ISA transfer to iWeb

easysaver

In this tax year I've subscribed £10k to a new S&S ISA. I'd now like to add the remaining £10k ISA allowance to my old iWeb ISA.

As I understand it, I can only contribute to one S&S ISA per tax year. To add to my iWeb ISA I thought I could open a new cash ISA, fund it with £10k then immediately transfer it to iWeb. I've had a look on iWeb but when trying a few cash ISA providers (e.g. Virgin Money, Leeds, Principality) they say it requires a "wet" signature. Does anyone know if iWeb accept any cash ISA transfers without the need for a wet signature (I assume it'd be slower by snail mail)?

Are there any flaws in my method?
Thanks!

eskbanker

easysaver said:

In this tax year I've subscribed £10k to a new S&S ISA. I'd now like to add the remaining £10k ISA allowance to my old iWeb ISA.

As I understand it, I can only contribute to one S&S ISA per tax year. To add to my iWeb ISA I thought I could open a new cash ISA, fund it with £10k then immediately transfer it to iWeb.

No, you can't do that - the rules require that all current year money for each ISA type is in the same ISA, regardless of which route it took to get there, so you can't route money via a cash ISA into a different S&S ISA from one you've already funded this year.

easysaver

Thanks.
I assume this is because you can only contribute to one ISA of each type in each tax year?
I guess the records sent from each provider to HMRC at the end of the tax year will state the contribution and ISA type. In my example above the new S&S ISA would say £10k and iWeb would say £10k thus contravening the one ISA rule. The cash ISA wouldn't even be reported because it was opened and transferred within the same tax year.

eskbanker

Essentially, yes - the transfer process has the same effect as if you'd contributed to the receiving ISA all along, so it would be reported at year end as two ISAs of the same type being funded concurrently with new money, which isn't permitted.

pochisoldi

Note:
"old money" = previous tax years' contributions
"new money" = this tax year's contributions
Also my iWeb S&S ISA was opened several years ago in parallel with an unsheltered share trading account. The ISA never received any funding until...

My iWeb transfer story, from the last tax year:
Wanted to Bed and ISA some shares, but I already have a S&S ISA from another provider which buys unit trust units on a monthly basis using "new money". This means that I couldn't just pay "new money" into the iWeb ISA.

I did a partial transfer from the Cash ISA to the iWeb S&S ISA, and used that "old money" to buy the shares.
This left me with the proceeds from the sale from the ordinary dealing account, which was eventually paid into the Cash ISA became "new money" in the cash ISA (to max out last year's allowance).

For an encore, in the first few weeks of this tax year, I partially transferred "old money" from the original Cash ISA into a newly opened Cash ISA.

So my situation is now:
Cash ISA (offsetting the mortgage) with "old money"
Cash ISA earning a half decent rate with "old money"
- Neither of these ISAs has received any "new money", so I could make contributions this year on one or the other (but not both)
In fact if I wanted to I could go to a third provider and put my "new money" in their cash ISA.

S&S ISA with "old money", and receiving "new money" monthly
iWeb S&S ISA with "old money", which can receive "old money" from another ISA via a partial transfer if required.