Transfer of existing Cash Isa to a better paying Cash ISA with the same provider

Genii

I have just tried to do this with a Cash ISA I have with HODGE Bank and they won't allow it, although I could transfer my Cash ISA I have with them to a different provider. The reason given is that a new cash ISA would need to be opened by them to transfer into (exactly as would happen if I transferred to another provider!) and that would break HMRC rules as I have already opened a Cash ISA for the current year. This seems wrong and ludicrous as the money being transferred is 'old, existing' ISA monies, not new, current year money. Since the interest rates have increased I have done this with other Cash ISA's I hold and other providers have moved my ISAs to new ones with them with higher rates with no problem. Are some providers interpreting HMRC rules wrongly as surely it isn't intended that you can only get a better rate of interest by moving your ISA money to a new provider?

xylophone

I opened current year's ISA with Skipton BS earlier this tax year - Skipton brought out a bonus ISA offering a better rate.

I opened the bonus ISA and requested a full transfer from the original to the new - all done and dusted on the same day.

sheffieldeagle

xylophone said:

I opened current year's ISA with Skipton BS earlier this tax year - Skipton brought out a bonus ISA offering a better rate.

I opened the bonus ISA and requested a full transfer from the original to the new - all done and dusted on the same day.

Me too. Sounds odd they won't let you do this. Don't they want your custom. Hope you get sorted.

Cheers

Albermarle

I did the same with Aldermore with no problem, although took a few days to process through their system.

OP - We often see on the forum, ISA providers ( or their staff ) misunderstanding ISA rules. Might seem odd but it does happen.
You could try going back to them and tell them they are mistaken.

xylophone

I have also transferred "old year" ISA accounts to  another ISA within Coventry BS.

If you google "internal transfer" and the name of the provider, the appropriate "how to" (form/ on line) normally comes up.

Examples

https://www.coventrybuildingsociety.co.uk/member/help/savings/isas/isa-transfers.html

https://www.ybs.co.uk/savings/isas-explained-transfers


Hodge do not appear to provide any such information.


Perhaps an internal transfer is simply not an option they offer?

25_Years_On

Genii said:

The reason given is that a new cash ISA would need to be opened by them to transfer into (exactly as would happen if I transferred to another provider!) and that would break HMRC rules as I have already opened a Cash ISA for the current year.

This is entirely incorrect. You can open new Cash ISAs and transfer existing ISA money into it. It's just a lack of training by Hodge. I've opened many new Cash ISAs with Cynergy this year as interest rates on new issues increase and transfer money over.