Transferring ISA

2

Comments

  • Albermarle
    Albermarle Posts: 22,046 Forumite
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    We see this misinformation from ISA providers too often.....
  • boingy
    boingy Posts: 1,330 Forumite
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    I haven't been very impressed by my Moneybox ISA. I know they are quite new to the market but their staff really don't seem to know enough about the product they are providing. I'm pondering transferring it out, although I might wait a month or two so they have had more experience of transferring ISAs out!
  • Madison
    Madison Posts: 174 Forumite
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    Those may be the rules but they're not being applied.  I've just tried transferring ot Castle Trust and I have to declare that:
    • I apply to subscribe to a Cash ISA for the tax year 2023/2024 and each subsequent year until further notice.I've already done this.
    • For current tax year ISA Transfers:I don't
    • I wish to transfer my existing ISA and subscribe to this Cash ISA for the tax year 2023/2024 I don't
    • I have not subscribed and will not subscribe more than one overall subscription limit in total to a Cash ISA, a Stocks and Shares ISA, an Innovative Finance ISA and a Lifetime ISA in the same tax year I have
    • For past tax year ISA Transfers: This is what I want to do
    • I wish to transfer my existing ISA and subscribe past tax year monies held to this Cash ISA
    • I have not subscribed/ made payments, and will not subscribe/ make payments, more than the overall subscription/payment limit in total to a Cash ISA and a stocks and shares ISA, an innovative Finance ISA and a lifetime ISA in the same tax year;  I have
    • 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've used my allowance for this year and will lose the interest if I transfer it

  • Madison
    Madison Posts: 174 Forumite
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    refluxer said:
    Madison said:
    Moneybox have just advised me that the rules don't allow me to transfer a cash ISA from 2022/23 into a new account in the current tax year as I've already paid into a cash ISA with another provider for this year, and would therefore be exceeding my allowance... 
    That's not correct. Unfortunately, even bank employees often don't fully understand ISA rules.

    It was a AI chat bot and I'm getting the same response from Zopa (and there's no way of contacting them by phone).  Meanwhile, Virgin have transferred my ISA that's just matured to one with a woefully bad interest rate.  I guess I'll have to wait until April and transfer all Cash ISAs to the one provider with the best interest rate.
  • eskbanker
    eskbanker Posts: 30,939 Forumite
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    Madison said:
    Those may be the rules but they're not being applied.  I've just tried transferring ot Castle Trust and I have to declare that:
    • I apply to subscribe to a Cash ISA for the tax year 2023/2024 and each subsequent year until further notice.I've already done this.
    • For current tax year ISA Transfers:I don't
    • I wish to transfer my existing ISA and subscribe to this Cash ISA for the tax year 2023/2024 I don't
    • I have not subscribed and will not subscribe more than one overall subscription limit in total to a Cash ISA, a Stocks and Shares ISA, an Innovative Finance ISA and a Lifetime ISA in the same tax year I have
    • For past tax year ISA Transfers: This is what I want to do
    • I wish to transfer my existing ISA and subscribe past tax year monies held to this Cash ISA
    • I have not subscribed/ made payments, and will not subscribe/ make payments, more than the overall subscription/payment limit in total to a Cash ISA and a stocks and shares ISA, an innovative Finance ISA and a lifetime ISA in the same tax year;  I have
    • 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've used my allowance for this year and will lose the interest if I transfer it
    That standard ISA declaration wording doesn't really accommodate opening an ISA solely in order to transfer in prior year money without falling foul of any current year restrictions, but the fact remains that you can transfer prior year money to whoever you wish, regardless of what you've done with your current year contributions.

    The first line is unhelpfully worded, but you're OK on both the penultimate and last lines, as you won't be exceeding the the annual limit and you won't be subscribing to the new one as such (the term really relates to new money, despite the impression given that it applies to old money too).
  • boingy
    boingy Posts: 1,330 Forumite
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    I've had to make similar "wrong" declarations recently when transferring ISAs. As long as you are confident you are within the ISA rules then go for it. They probably won't send round a SWAT team...
  • refluxer
    refluxer Posts: 2,674 Forumite
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    edited 9 February at 12:51PM
    Madison said:
    Those may be the rules but they're not being applied.  I've just tried transferring ot Castle Trust and I have to declare that:
    • I apply to subscribe to a Cash ISA for the tax year 2023/2024 and each subsequent year until further notice.I've already done this.
    • For current tax year ISA Transfers:I don't 
    • I wish to transfer my existing ISA and subscribe to this Cash ISA for the tax year 2023/2024 I don't
    • I have not subscribed and will not subscribe more than one overall subscription limit in total to a Cash ISA, a Stocks and Shares ISA, an Innovative Finance ISA and a Lifetime ISA in the same tax year I have
    • For past tax year ISA Transfers: This is what I want to do
    • I wish to transfer my existing ISA and subscribe past tax year monies held to this Cash ISA
    • I have not subscribed/ made payments, and will not subscribe/ make payments, more than the overall subscription/payment limit in total to a Cash ISA and a stocks and shares ISA, an innovative Finance ISA and a lifetime ISA in the same tax year;  I have
    • 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've used my allowance for this year and will lose the interest if I transfer it

    That's a standard ISA declaration and you will have to sign that with any provider you're wanting to open an ISA with. If you're transferring in a cash ISA containing subscriptions from previous tax years, then a lot of those statements don't apply to you and can be ignored...

    • I apply to subscribe to a Cash ISA for the tax year 2023/2024 and each subsequent year until further notice. strictly speaking you're not 'subscribing' to this one, but I guess this covers you for the future if you were wanting (or able) to (if, for example, it was an easy access ISA or a fixed rate ISA you could continue to add to throughout the term)
    • For current tax year ISA Transfers: these parts aren't relevant to you
    • I wish to transfer my existing ISA and subscribe to this Cash ISA for the tax year 2023/2024 not relevant
    • I have not subscribed and will not subscribe more than one overall subscription limit in total to a Cash ISA, a Stocks and Shares ISA, an Innovative Finance ISA and a Lifetime ISA in the same tax year not relevant, but a similar statement covering the ISA allowance is in the next section
    • For past tax year ISA Transfers: relevant
    • I wish to transfer my existing ISA and subscribe past tax year monies held to this Cash ISA correct
    • I have not subscribed/ made payments, and will not subscribe/ make payments, more than the overall subscription/payment limit in total to a Cash ISA and a stocks and shares ISA, an innovative Finance ISA and a lifetime ISA in the same tax year;  this is just about ensuring you don't use more than your £20k ISA allowance - ISA rules dictate that transfers of ISAs containing money from previous tax years don't count towards the current tax year's allowance so as long as you haven't paid more than £20k of new subscriptions in total into other ISAs since 6th April 2023, then this statement will be true
    • I have not subscribed, and will not subscribe, to another Cash ISA in the same tax year that I subscribe to this Cash ISA; this isn't relevant because you're not 'subscribing' to (paying 'new' money into) this one

    Myself and other forum members do exactly as you're wanting to do on a regular basis throughout the year and have to sign one of those each time.





  • refluxer
    refluxer Posts: 2,674 Forumite
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    Madison said:
    refluxer said:
    Madison said:
    Moneybox have just advised me that the rules don't allow me to transfer a cash ISA from 2022/23 into a new account in the current tax year as I've already paid into a cash ISA with another provider for this year, and would therefore be exceeding my allowance... 
    That's not correct. Unfortunately, even bank employees often don't fully understand ISA rules.

    It was a AI chat bot and I'm getting the same response from Zopa (and there's no way of contacting them by phone).  Meanwhile, Virgin have transferred my ISA that's just matured to one with a woefully bad interest rate.  I guess I'll have to wait until April and transfer all Cash ISAs to the one provider with the best interest rate.
    Based on what you've told us (that this is a cash ISA that doesn't contain subscriptions from the current tax year ?), you don't need to wait until April to transfer it. You don't need to chat to any bots or customer service agents - you just need to pick an ISA that has the best rate and/or meets your needs (plus allows transfers-in), apply for the transfer and sign the declaration.

    If this gives you any reassurance, I'll be in an identical situation next month when I also have a fixed rate cash ISA (containing subscriptions from previous tax years) that matures. I'll be opening a new cash ISA, transferring the balance of that one into it and signing exactly the same ISA declaration as you above, despite having taken out a fixed rate cash ISA with my 2023-24 ISA allowance towards the end of last year. The important thing to remember is that transfers of ISAs containing subscriptions from previous tax years don't count towards the current tax year's ISA allowance.

    BTW - if it's fixed rate cash ISAs you're looking at, are you aware that Virgin currently have the highest-paying one year fix ? It's an 'exclusive' ISA though, so you'd need a Virgin current account to qualify.
  • Madison
    Madison Posts: 174 Forumite
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    Enormous thanks, everyone for your advice.  Zopa must have updated their app as it's just given me the option to transfer in, and I only had to declare that I hadnt paid into the ISA I'm transferring in the current tax year.  Phew.

    One more question, I asked them to ransfer the full balance including the interest paid at the end of the term.  Will I get interest on this interest if I leave it in the new ISA, or just on the £20k transferred?  In other words, should I withdraw it and pay it into a standard savings account and/or spend it?
  • eskbanker
    eskbanker Posts: 30,939 Forumite
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    Madison said:
    One more question, I asked them to ransfer the full balance including the interest paid at the end of the term.  Will I get interest on this interest if I leave it in the new ISA, or just on the £20k transferred?  In other words, should I withdraw it and pay it into a standard savings account and/or spend it?
    If you're transferring the balance including interest then it'll presumably be £21K (or similar), but the short answer is that once transferred there's no artificial distinction between the capital and interest components of the transferred balance.
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