Yet another ISA transfer question thread.

Ozzig

Morning,

I've had a good search through the forum and *think* I know the answer, but wanted to make sure.

To start, I know I can only open one new cash ISA per tax year and fund it up to £20k.

But I am a little unsure how the transferring stuff works.

So far I know, if I opened a cash ISA now and funded it £20k I could then transfer in a previous tax year's ISA of £20k giving a total of £40k in one ISA.

What I'm unsure about, after reading some threads, is whether I can transfer an existing ISA into a new cash ISA as well. 

One thread suggested multiple ISAs from previous tax years can be transferred into "new" cash ISAs this tax year as long as they are not funded this tax year.

Does that make sense? Sorry, for the potentially dumb question.

Thanks.

Warslet

As previous tax year cash ISAs are not new funds you would be able to transfer into a cash ISA opened in the current tax year. You would need to check with the provider of your new cash ISA if they allow transfers in as not all do. Multiple ISAs can be transferred from previous tax years but beware of the FSCS limit of £85,000 with one provider if and when transferring. 

Ozzig

It's the "cash ISA opened in the current tax year" bit that I'm unsure about.

So, assuming the providers all allow transfers in and the £85k FSCS isn't a problem.

Other threads have suggested I could -

Open a cash ISA today and fund it. £20k
Then open another cash ISA tomorrow by transferring a previous year's ISA into it. Could be £20k could be £60k

Or, if I had 10 historic ISAs, transfer them individually into 10 "new" ISAs, as long as I only put new funds into one ISA it's okay.

Is that right ??? 

refluxer

Ozzig said:

It's the "cash ISA opened in the current tax year" bit that I'm unsure about.

It's often the wording on an ISA provider's declaration that causes this confusion, as these declarations tend to be geared towards the scenario where the ISA will be funded from the current tax year's allowance, rather than (for example) a transfer of an ISA containing money from a previous tax year, when some of the statements won't actually be relevant.

Essentially, when they make you agree to a declaration that includes statements like "I have not subscribed and will not subscribe to another Cash ISA in the same tax year that I subscribe to this cash ISA", the word 'subscribe' refers to paying money from the current tax year's allowance into an ISA and this doesn't include transfers containing subscriptions from previous tax years.

The important things to remember are that all new subscriptions from the current tax year have to stay together (and therefore you can't pay new subscriptions into two different cash ISAs at any one time) and that ISA transfers containing subscriptions from previous tax years don't count towards the current tax year's allowance.

Ozzig said:

So, assuming the providers all allow transfers in and the £85k FSCS isn't a problem.

Other threads have suggested I could -

Open a cash ISA today and fund it. £20k
Then open another cash ISA tomorrow by transferring a previous year's ISA into it. Could be £20k could be £60k

Or, if I had 10 historic ISAs, transfer them individually into 10 "new" ISAs, as long as I only put new funds into one ISA it's okay.

Is that right ??? 

Yes to both of those. I tend to keep ISAs from each tax year separate as this has a number of advantages IMO, including pretty-much ensuring that you don't break any of these rules and it also avoids issues with the FSCS limit (at least not for a very long time !) provided you spread your ISAs among different providers. The only ISAs I've combined date back to the time when the limit was much lower than it is today.

Ozzig

Yes to both of those. I tend to keep ISAs from each tax year separate as this has a number of advantages IMO, including pretty-much ensuring that you don't break any of these rules and it also avoids issues with the FSCS limit (at least not for a very long time !) provided you spread your ISAs among different providers. The only ISAs I've combined date back to the time when the limit was much lower than it is today.

Thanks @refluxer with that in mind, my plan is now, to open a new ISA this year fully funded. 

Then when my existing ISA matures (a smaller one) later this tax year, open a new ISA by transferring it in. Followed by the transferring in of a second maturing ISA a few months later.

That way, a little like yourself, I'll have them with different providers.

refluxer

Ozzig said:

Yes to both of those. I tend to keep ISAs from each tax year separate as this has a number of advantages IMO, including pretty-much ensuring that you don't break any of these rules and it also avoids issues with the FSCS limit (at least not for a very long time !) provided you spread your ISAs among different providers. The only ISAs I've combined date back to the time when the limit was much lower than it is today.

Thanks @refluxer with that in mind, my plan is now, to open a new ISA this year fully funded. 

Then when my existing ISA matures (a smaller one) later this tax year, open a new ISA by transferring it in. Followed by the transferring in of a second maturing ISA a few months later.

That way, a little like yourself, I'll have them with different providers.

Yes, that sounds fine. If combining the two transfers is important to you then, when you open the ISA for your first transfer, just make sure it's one that allows transfers at a later date. This might not be an issue for an easy access ISA, but many fixed rate ISAs have a limited window for transferring in. Make sure you read the T&Cs for any ISA that you're considering carefully.

RSD7a

Jings, I think keep thinking I've got it and then it goes again. Can I develop the question a bit further ?

Last tax year I put £20k into a cash ISA with provider A. This tax year I deposited another £20k into the same account. Now rates are rising even more, can I take £20k from my ISA with provider A (notionally last year's £20k) and put it into a brand new cash ISA with provider B?

Doctor_Who

RSD7a said:

Jings, I think keep thinking I've got it and then it goes again. Can I develop the question a bit further ?

Last tax year I put £20k into a cash ISA with provider A. This tax year I deposited another £20k into the same account. Now rates are rising even more, can I take £20k from my ISA with provider A (notionally last year's £20k) and put it into a brand new cash ISA with provider B?

Yes, you can do that, but make sure you use the 'ISA transfer' service from provider B. Obviously the ISA you open with provider B must accept transfers-in.