Cash Isa

Me72

Opened new fixed cash Isa in April this year, with 20k, no further deposits allowed this financial year. 

An existing Cash Isa is maturing in October this year. I know 20k per year is the deposit limit but is it possible to open a new Isa & transfer second Isa amount, to obtain a new rate ? This would mean I had not deposited more than 20k limit for the year. 

ColdIron

Yes that's right, transfers don't count against the subscription limit

XzavierWalnut

Wait a few days and see if the rates go up again after the BOE review today.

tiger70

Me72 said:

Opened new fixed cash Isa in April this year, with 20k, no further deposits allowed this financial year. 

An existing Cash Isa is maturing in October this year. I know 20k per year is the deposit limit but is it possible to open a new Isa & transfer second Isa amount, to obtain a new rate ? This would mean I had not deposited more than 20k limit for the year. 

I'm in the same position as you, but mine matures in Novermber . I'll be doing the same .

TiVo_Lad

ColdIron said:

Yes that's right, transfers don't count against the subscription limit

You can open as many ISAs as you like; you just can't subscribe (put new money) into more than one of them. So you could, if you wanted, move some of your maturing funds into another fixed ISA and some into an Easy Access ISA, depending on your requirements. The choice is yours. Just make sure you do everything as an ISA Transfer to avoid losing the tax-free status of your cash.

Albermarle

FYI there is a separate forum for ISA's. If you scroll through it there are lots of threads about ISA transfers.

ISAs & tax-free savings — MoneySavingExpert Forum

Lumphammer2

To open a new Nat West Fixed Rate ISA you have to declare that 'I have not subscribed and will not subscribe to another cash ISA in the same tax year that I subscribe to this cash ISA.'

I suggest reading the small print for each bank.

I know the intention of the government that you cannot deposit more than £20K per annum into ISA's, so if you transferred in funds from previous years you would not be breaking the spirit of the law, but I can't see how you can sign this or similar declarations if you have invested elsewhere in the current tax year.

My guess is that, administratively, it would be very difficult to ensure that people are not breaking the £20k limit without having T & C similar to the declaration above.

Any experts like to comment on this guess?

Albermarle

When you transfer an ISA to a new ISA, you are not subscribing to it ( adding new money to it) , so you can just say no to answer the question.

ColdIron

Lumphammer2 said:

I know the intention of the government that you cannot deposit more than £20K per annum into ISA's, so if you transferred in funds from previous years you would not be breaking the spirit of the law, but I can't see how you can sign this or similar declarations if you have invested elsewhere in the current tax year.

The intention of the Government is Not to stop you depositing more than £20,000, the limitation applies to subscriptions only

Transfers and subscriptions are very different things

Lumphammer2

Many thanks for the replies.  I am now clear on the distinction between subscribe and transfer, and the semantics.

However, it is very confusing when Nat West ask above the declaration invite me to agree with 'I apply to subscribe to a cash ISA for the tax year 2023/2024......' - and with no mention of transfers and no way of contacting them!

Markyh65

I want to understand something as never opened ISA before. I am investing into one with 2 yr fixed and am opening one up for my wife with one year fixed. Next year when hers matures and I open a new one for her and transfer across the funds,do I have to leave the interest in the original or transfer it into the new or withdraw it and do I have to pay tax if I withdraw the interest?