Transferring last years cash ISA question

Dr_Wu

Apologies in advance for this dumb question but I can't quite grasp the ISA rules yet!

I deposited £20K in a 2 year fixed rate Virgin cash ISA last November (2022). I now have an additional £12K that I intend to put in a new Virgin cash ISA using this years allowance.

The rates are a bit better this year so I was wondering if I could transfer the £20K I have sitting in last year's ISA into the proposed new ISA with the better rate along with the £12K new money I will be investing with this year's allowance or does that take me over the annual limit? i.e. does last year's 20K count towards this years limit?

As always, thanks in advance

eskbanker

The £20K limit denotes how much new money you can contribute to ISAs in any tax year, so transferring prior year money doesn't count towards this, provided the correct ISA transfer process is used.

Zuzi

Doesn't the fact that yours is a 2 year fixed rate ISA mean that the money needs to stay where it is for two years? 

(I may be completely wrong in which case someone else will hopefully clarify, but that was my understanding of ISAs fixed for a certain term. I thought they can't be transferred out before the term is over.)

Dr_Wu

Zuzi said:

Doesn't the fact that yours is a 2 year fixed rate ISA mean that the money needs to stay where it is for two years? 

(I may be completely wrong in which case someone else will hopefully clarify, but that was my understanding of ISAs fixed for a certain term. I thought they can't be transferred out before the term is over.)

Good point, I'll check that out.

eskbanker

Dr_Wu said:

Zuzi said:

Doesn't the fact that yours is a 2 year fixed rate ISA mean that the money needs to stay where it is for two years? 

(I may be completely wrong in which case someone else will hopefully clarify, but that was my understanding of ISAs fixed for a certain term. I thought they can't be transferred out before the term is over.)

Good point, I'll check that out.

You can transfer it to another ISA, but there will be a penalty charge for doing so.

35har1old

eskbanker said:

Dr_Wu said:

Zuzi said:

Doesn't the fact that yours is a 2 year fixed rate ISA mean that the money needs to stay where it is for two years? 

(I may be completely wrong in which case someone else will hopefully clarify, but that was my understanding of ISAs fixed for a certain term. I thought they can't be transferred out before the term is over.)

Good point, I'll check that out.

You can transfer it to another ISA, but there will be a penalty charge for doing so.

Likely to be 90 days loss of interest

Albermarle

Apologies in advance for this dumb question but I can't quite grasp the ISA rules yet!

It is not a dumb question but it is one that has been asked and answered numerous times before. Suggest an hour reading through the forum would be good to bring you up to speed with ISA rules.