A cash ISA from 23/24 tax year

doingitanyway

I have a cash ISA from 23/24 tax year. Now I have the interest added, can I close and transfer the funds plus interest to a non ISA savings account giving a better rate. Then open a new ISA before April 2025 and use it as a tax free wrapper?

Have I understood this correctly?

Thank you. 

gravel_2

Ideally you would open a new ISA now and have the new provider request the old provider to transfer the money. This way you keep the ISA tax protection and can pay in a further up to 20k before April 2025.

The only reason to withdraw the money outside of the ISA would be to spend it.

doingitanyway

Thank you @gravel_2 I will be spending it in the next 6 weeks.

I want to put it into a higher interest account for those 6 weeks. In doing so do I lose the tax free interest I accumulated? 

Middle_of_the_Road

No, you will not lose the interest you earned in the ISA, which also will be tax exempt. Interest in the standard savings accounts will be liable to tax though.

gravel_2

doingitanyway said:

Thank you @gravel_2 I will be spending it in the next 6 weeks.

I want to put it into a higher interest account for those 6 weeks. In doing so do I lose the tax free interest I accumulated? 

If its an easy access ISA or a fix that has matured then you can withdraw it all as you would a normal bank account. All you lose is the tax-free status going forward. No issue if you're spending it...

doingitanyway

Middle_of_the_Road said:

No, you will not lose the interest you earned in the ISA, which also will be tax exempt. Interest in the standard savings accounts will be liable to tax though.

Thank you. The interest in the standard savings account in 6 weeks will be minimal, but useful.

gravel_2 said:

If its an easy access ISA or a fix that has matured then you can withdraw it all as you would a normal bank account. All you lose is the tax-free status going forward. No issue if you're spending it...

Thank you. That is very clear.