Savings Tax Query

Moneycraver05

Hi all,

Last year, I had 3 ISAs with Nationwide. I wanted to transfer them into an ISA with another provider following their staggered expiry in October and November.

I went into Nationwide and the person behind the counter said I needed to transfer them to my current account and then to my new ISA provider, which I did. All in all, this was 4000 including interest.

I have now found out that it was the wrong thing to do - that I should have asked the new provider to complete a transfer form.

My query is, will I have paid tax now on the interest or the whole 4000 with having transferred it into my current account?

TadleyBaggie

Nope, the interest paid within the ISA does not suddenly get taxed when taken out of it.

sammy_zammy

If you’re putting the £4,000 back into another ISA, make sure you haven’t already paid more than £16,000 paid into ISAs this tax year, so you don’t breach the £20,000 limit.

No idea why Nationwide would have told you this…

Moneycraver05

Thank you both 😀 luckily I'm not due to reach my ISA limit until the end of the year and so I'm thankful for finding this out now.

Thank you both once again for your help.

singhini

OP - i'm not usually the type of person to complain but in this instance i would.
For the Building Society to tell you the completely wrong information is just not acceptable (especially when ISA's have been around for so long as a product). i think they have been around since 1999 as ISA's

I think i would write a letter of complaint pointing out the mistake they made and how it leaves you short of about £160 (if the £4k was kept in the ISA wrapper and transferred and invested with a realistic interest rate of say 4% that's £160). I would ask for compensation of £160

I know you say your not due to reach you ISA limit in this tax year but nonetheless you equally might come into money and could potentially be in a position to max out your £20k allowance.

PS: Your handle is Moneycraver (need i say anymore)!