ISA transfer rules

bobblebob

I currently have a ISA Saver Variable with Halifax. Im wanting to transfer this into the ISA Saver Bonus (again with Halifax) as it pays 4.10% if you make less than 3 withdrawals. I have already paid money into my current ISA this year, but if i transfer it to this new ISA can i still continue to pay money into that?

I know your only meant to pay into 1 ISA per year, but does this include transfers?

Thanks

Doctor_Who

bobblebob said:

I currently have a ISA Saver Variable with Halifax. Im wanting to transfer this into the ISA Saver Bonus (again with Halifax) as it pays 4.10% if you make less than 3 withdrawals. I have already paid money into my current ISA this year, but if i transfer it to this new ISA can i still continue to pay money into that?

I know your only meant to pay into 1 ISA per year, but does this include transfers?

Thanks

You will have to transfer all of this year's subscription (what you have already paid in since 6 April) from the old ISA to the new ISA. Once you've done that you can continue to pay into the new ISA, as long as the T&Cs allow it, upto the £20K allowance (assuming you're not paying into another ISA, e.g. S&SISA).

bobblebob

Yea only have the cash ISA

Im happy to transfer all the money into the new one. I have been using my ISA like a traditional savings where i have been adding money some months, taking money out the next.

So long as i transfer the full balance of whatever it is when i do the transfer, im ok then? Because some of the money ive paid in since April i have already transferred to my current account to pay bills etc

refluxer

bobblebob said:

Yea only have the cash ISA

Im happy to transfer all the money into the new one. I have been using my ISA like a traditional savings where i have been adding money some months, taking money out the next.

So long as i transfer the full balance of whatever it is when i do the transfer, im ok then? Because some of the money ive paid in since April i have already transferred to my current account to pay bills etc

Yes, if you transfer the full balance across then that will obviously include anything you've paid in during the current tax year and therefore you won't be breaking any ISA rules. I would just make sure you don't pay into the new one until after the transfer has taken place and the transferred funds have been credited to the new account.

It looks like both ISAs are flexible - is this a feature you intend to take advantage of ? If so, it might be worth checking whether any withdrawn funds need to be returned to the ISA Saver account before you transfer across or whether that flexibility extends across both ISAs. I don't use ISAs in this way so don't know the answer to that one.

Doctor_Who

If you transfer the full balance (and hence close the old ISA) you will, by definition, be transferring all of this year's subscription. The current ISA should show you what your remaining subscription is and after the transfer this will be your remaining subscription for the new ISA this tax year.

Since you pay money in and withdraw money from the ISA, a flexible ISA (I don't know whether the Halifax ISAs are flexible, see the T&Cs) might be beneficial. With a flexible ISA you can replace any money you have withdrawn within the tax year and the replacement money does not count as a new subscription. See here for how they work:

https://www.moneysavingexpert.com/savings/flexible-isas/

bobblebob

Thank you both. Yes both are flexible and that is something i like as i currently have a large sum of money fixed into a saving accounts.

In the link posted it states:

"The key rule is you must replace the money in the same ISA account you took it out from"

My current ISA has a remaining balance of £20,300. Basically as the current ISA i have is flexible, and ive taken £300 out more than i have paid in this tax year. So will that break the rules if i transfer?

Doctor_Who

Can you return the £300 to the existing flexible ISA and then do the transfer? I don't think the transfer will break any rules, but I do wonder if you can then return the £300 to the new flexible ISA and it not count as new subscription (as MSE says - you won't be returning it to the same flexible ISA). Hopefully someone else will have greater knowledge about this than I do, or you could contact Halifax to ask their opinion?

bobblebob

I wouldnt be able to transfer the £300 at this moment as require that money.

But yea will try Halifax if no one on here knows the answer

Thanks you

bobblebob

Well i rang Halifax and they didnt seem to know. Person i spoke to said it should be ok but wasnt 100%

So still none the wiser if what i want to do is breaking rules or not

refluxer

bobblebob said:

Thank you both. Yes both are flexible and that is something i like as i currently have a large sum of money fixed into a saving accounts.

In the link posted it states:

"The key rule is you must replace the money in the same ISA account you took it out from"

My current ISA has a remaining balance of £20,300. Basically as the current ISA i have is flexible, and ive taken £300 out more than i have paid in this tax year. So will that break the rules if i transfer?

That key rule seems pretty clear in that any money you've withdrawn from the current ISA will need to be replaced before any transfer takes place, if you want to retain your full £20k allowance for this tax year.

How much money have you paid into your current ISA this tax year and how much have you withdrawn ? 

I think those two figures will be key to determining how much you'll be able to contribute to the new ISA.

bobblebob

refluxer said:

bobblebob said:

Thank you both. Yes both are flexible and that is something i like as i currently have a large sum of money fixed into a saving accounts.

In the link posted it states:

"The key rule is you must replace the money in the same ISA account you took it out from"

My current ISA has a remaining balance of £20,300. Basically as the current ISA i have is flexible, and ive taken £300 out more than i have paid in this tax year. So will that break the rules if i transfer?

That key rule seems pretty clear in that any money you've withdrawn from the current ISA will need to be replaced before any transfer takes place, if you want to retain your full £20k allowance for this tax year.

How much money have you paid into your current ISA this tax year and how much have you withdrawn ? 

I think those two figures will be key to determining how much you'll be able to contribute to the new ISA.

@refluxer Ive withdrawn £300 more than i have paid in. Think its around 3k out and 2.7k in

Im not bothered about losing abit of the 20k allowance as between now and next April i doubt i will be paying more than a few grand in anyway. Its just when you look at the rules it says you have to replace the money you withdrew into the same ISA before transferring

So what are the consequences if you dont? If its you only lose abit of your allowance thats fine like i say i wont be anywhere near 20k anyway come April. Im just not sure if there are other consequences for breaking that "rule"