Transferring an ISA and yearly allowance.

DavePBC

I am confused because I have had conflicting advice from the same institution! I have a 2 year ISA (opened tax year 22-23) due to mature this month. One option is to transfer the balance to a new ISA with the same provider. The balance with interest is over £20K. I used my full allowance of 20K to open another ISA with a different provider this tax year (24-25). If I transfer the whole balance of my matured ISA into another ISA will I be deemed to have exceeded my allowance for this tax year given I have already invested 20k in a new ISA, OR are transfers of matured ISAs not considered as part of the yearly allowance? 

p00hsticks

No (you will not have exceeded your 2024-25 allowance) and Yes (transfers of funds of Isas opened in previous years are not counted as part of the current years allowance) 

Bobblehat

DavePBC said:

I am confused because I have had conflicting advice from the same institution! I have a 2 year ISA (opened tax year 22-23) due to mature this month. One option is to transfer the balance to a new ISA with the same provider. The balance with interest is over £20K. I used my full allowance of 20K to open another ISA with a different provider this tax year (24-25). If I transfer the whole balance of my matured ISA into another ISA will I be deemed to have exceeded my allowance for this tax year given I have already invested 20k in a new ISA, OR are transfers of matured ISAs not considered as part of the yearly allowance? 

So what was the conflicting advice?

I have just today seen the completion of a transfer of a recently matured ISA (£20K+), originally funded in 22-23 to another provider, while having funded a 24-25 ISA (£20K) with a different provider from either of the providers involved in the older ISA .... no problems whatsoever.

DavePBC

On initial enquiry I was told the transfer balance with interest (>20K in total) would not be allowed as it would be counted in the 24-25 allowance. I pondered this and thought something was not right (seemed to defeat the whole purpose of keeping money within the ISA 'envelope') so enquired again. The agent 'spoke to someone more senior' and confirmed I could transfer even if I had used this year's allowance on a new ISA. But the conflicting advice still unsettled me - hence my appeal to the forum!

Bobblehat

DavePBC said:

............... But the conflicting advice still unsettled me - hence my appeal to the forum!

I know what you mean!

The T&C's of the ISA provider that received the transfer from the older ISA (and older provider), stated that I could not have subscribed to an ISA in 24-25. I queried this by "live chat" and was told I could ignore that as it didn't apply to transfers of old ISA's. I had an idea that it was not relevant, but just had to check anyway, as you do!

Yorkie1

It's about new money per tax year. You can add up to £20K new money per tax year (ignoring withdrawals and reinvestments in a flexible ISA).

The transfer of an existing ISA is not adding new money (assuming it's done by the new provider) - you're just changing the name of the provider which has this older money.

Bobblehat

Yorkie1 said:

It's about new money per tax year. You can add up to £20K new money per tax year (ignoring withdrawals and reinvestments in a flexible ISA).

The transfer of an existing ISA is not adding new money (assuming it's done by the new provider) - you're just changing the name of the provider which has this older money.

I knew that, so that's why I queried the provider's actual wording in the T&C's, rather than leaving any excuse for them to try to return my ISA money at a later date to a then "closed" ISA account and it ending up out of the ISA wrapper!

lr1277

I don't know your intended destination ISA, but I was looking at transferring in to a Yorkshire Building Society ISA.

They have options to transfer in existing ISA's including fixed term ISA's. In the latter case, you can supply a maturity date and I think the ISA will be transferred on or after that date. Seemed very flexible to me.

I don't know how other ISA providers manage their transfers in.

badger09

lr1277 said:

I don't know your intended destination ISA, but I was looking at transferring in to a Yorkshire Building Society ISA.

They have options to transfer in existing ISA's including fixed term ISA's. In the latter case, you can supply a maturity date and I think the ISA will be transferred on or after that date. Seemed very flexible to me.

I don't know how other ISA providers manage their transfers in.

BIB
This is the standard approach, though most specify a time period eg 30 days, within which your maturing ISA must transfer. 

I understand that Trading T212 insist funds must be available for immediate transfer but I’m not aware of any others. 

artyboy

badger09 said:

lr1277 said:

I don't know your intended destination ISA, but I was looking at transferring in to a Yorkshire Building Society ISA.

They have options to transfer in existing ISA's including fixed term ISA's. In the latter case, you can supply a maturity date and I think the ISA will be transferred on or after that date. Seemed very flexible to me.

I don't know how other ISA providers manage their transfers in.

BIB
This is the standard approach, though most specify a time period eg 30 days, within which your maturing ISA must transfer. 

I understand that Trading T212 insist funds must be available for immediate transfer but I’m not aware of any others. 

To be fair, T212 transfers are lightning fast compared to anything else I've experienced (Mrs Arty's completed in a week) so I can understand that requirement from them!