ISA intrest takes me to over 20k

steve981

I've just had an isa mature with 20k plus intrest. I've transfered the 20k to a new ISA and had planned to withdraw the intrest and invest it in a new ISA in the new financial year, as I thought that transferring the whole amount would be against the ISA rules as it would have been over 20k. Could I have transferred the whole amount or does it need to be kept to 20k for transfers?

retiredbanker1

steve981 said:

I've just had an isa mature with 20k plus intrest. I've transfered the 20k to a new ISA and had planned to withdraw the intrest and invest it in a new ISA in the new financial year, as I thought that transferring the whole amount would be against the ISA rules as it would have been over 20k. Could I have transferred the whole amount or does it need to be kept to 20k for transfers?

You are mistaken.
You are allowed to put £20k into a Cash ISA in any one tax year - so you could have left the interest in and then put more money in next tax year.

masonic

There is also no limit to the amount you can transfer. Some people have cash ISAs of £80k+ that they transfer between providers. It is advisable to split them to keep below the FSCS compensation limit of £85k, but again this can be done without making a withdrawal and using any more of your annual allowance.

xylophone

Could I have transferred the whole amount or does it need to be kept to 20k for transfers?


Yes, you could have done this.

jimjames

steve981 said:

I've just had an isa mature with 20k plus intrest. I've transfered the 20k to a new ISA and had planned to withdraw the intrest and invest it in a new ISA in the new financial year, as I thought that transferring the whole amount would be against the ISA rules as it would have been over 20k. Could I have transferred the whole amount or does it need to be kept to 20k for transfers?

Bad move, unfortunately you've now reduced the amount you can pay into the new ISA by £20k-(interest amount). If you'd left the interest in the ISA you could have paid in the full £20k. Always best to ask the question before taking action to avoid this sort of issue. (although re-reading it doesn't make it clear if you actually withdrew the interest or if it is still in the old ISA wrapper - if it is then all isn't lost and you should be able to transfer that too)

Reed_Richards

You could have built-up an ISA worth one hundred thousand pounds or even one million pounds over the years and you could transfer all of it without any restrictions.  Of course, to ensure FSCS protection you might not want to keep all your eggs in the one basket.

Albermarle

steve981 said:

I've just had an isa mature with 20k plus intrest. I've transfered the 20k to a new ISA and had planned to withdraw the intrest and invest it in a new ISA in the new financial year, as I thought that transferring the whole amount would be against the ISA rules as it would have been over 20k. Could I have transferred the whole amount or does it need to be kept to 20k for transfers?

Suggest you spend some time reading through this forum in future to get up to speed with ISA rules.

V3cash

I’m glad I came on and looked as I’ve just started investing in ISA’s and this is useful to know for the future.

MeteredOut

Is the interest still in the original ISA. If so, and you did a partial transfer of £20K from your old ISA to you new ISA, is there anything in the T&Cs stopping you from doing another full transfer over to the new ISA?

If you've withdrawn the interest from your old ISA, but haven't used this tax years full £20K allowance, you might still be able to add it to your new ISA in this tax year (again, depending on its funding rules)

saajan_12

The 20k just applies for new money going from *not isa* to *isa*. If you're transferring from one ISA to another ISA, then as long as you get the providers to sort it out between themselves, you can transfer as much as you like and still add the whole 20k of new money.