Newbie to ISA help!

ajc18

Hi all - i have been saving in a Chase savings account this year as interest rate was equal to ISA. I have £20000 in the account (no other savings) It looks like  I will have tax to pay on the interest (higher rate tax payer). Should I open a cash ISA and pay the lump sum in before the end of this tax year? If I do, if I open a new cash ISA in April 2024 and transfer the full amount into the new ISA account will that mean I am unable to deposit any more into the new ISA for that tax year (as £20,000 would have been transferred in-the full allowance for the year)? Or would I be better leaving the savings that I have in the savings account and waiting and opening a ISA in April, and deposit the full amount then? To me this seems like I'm losing the tax allowance for this year? I'm just confused! Help! 

eskbanker

You can pay the £20K into an ISA within this tax year, and then still have your 2024/25 £20K allowance available after 6 April - you could choose to transfer the 2023/24 money to a new ISA if you wanted to (without affecting the 2024/25 allowance for new money) but there's no need to.

Albermarle

I'm just confused! Help! 

Suggest you spend some time reading through this forum, and then I think you will be less confused.

ajc18

eskbanker said:

You can pay the £20K into an ISA within this tax year, and then still have your 2024/25 £20K allowance available after 6 April - you could choose to transfer the 2023/24 money to a new ISA if you wanted to (without affecting the 2024/25 allowance for new money) but there's no need to.

Thank you eskbanker, this is very helpful 😊 

ajc18

Albermarle said:

I'm just confused! Help! 

Suggest you spend some time reading through this forum, and then I think you will be less confused.

Having already done so, and remaining confused, I thought I'd reach out for some advice. Thanks for your thoughts

Ocelot

ajc18 said:

Albermarle said:

I'm just confused! Help! 

Suggest you spend some time reading through this forum, and then I think you will be less confused.

Having already done so, and remaining confused, I thought I'd reach out for some advice. Thanks for your thoughts

You can put up to 20k of new money into an ISA every tax year.

Transferring money from one ISA to another doesn't count towards this limit.

If you put the Chase money into an ISA now it will count towards your 23/24 tax year, allowing you to deposit up to another 20k in the 24/25 tax year. This might be the better option (assuming the Chase account is easy access), although you will still potentially be liable for tax on the 11 months of this tax year while you had the account.

badger09

Ocelot said:

ajc18 said:

Albermarle said:

I'm just confused! Help! 

Suggest you spend some time reading through this forum, and then I think you will be less confused.

Having already done so, and remaining confused, I thought I'd reach out for some advice. Thanks for your thoughts

You can put up to 20k of new money into an ISA every tax year.

Transferring money from one ISA to another doesn't count towards this limit.

If you put the Chase money into an ISA now it will count towards your 23/24 tax year, allowing you to deposit up to another 20k in the 24/25 tax year. This might be the better option (assuming the Chase account is easy access), although you will still potentially be liable for tax on the 11 months of this tax year while you had the account.

BIB For the avoidance of any doubt, this is true only if you ask the new ISA provider to arrange the transfer. If you move the money yourself it would count as part of the allowance.