ISA switch

Allen6061

Hi,

I have a maturing ISA that I want to reinvest in a higherm % rate ISA with another provider. Problem is, I've already used my £20k allowance for this year so want to put it in an ISA in my wife's name.

Can't do it direct as a transfer as the name on both accounts has to be the same.

Can I withdraw it into a savings account of mine, keep the interest then transfer the £20k into an ISA in her name?

Surely it should all be tax free as the initial £20k has been taxed already as earnings back whenever and the interest is tax free?

Plus my wife has retired early, has minimal income therfore nowhere near the £12570 tax threshold.

Thanks in advance. 

Peter999_2

I think you're getting a bit confused.     Your maturing ISA will be tax free forever if you keep it in a ISA - you don't use your £20,000 allowance when you transfer it to a new provider.

You don't need to put it in your wife's name at all.    Just transfer it to a new provider, just make sure you don't withdraw the money or anything like that.      Check with your new provider that they accept transfers in, open the ISA, tell them you want to transfer in.  They will then ask you where from and then within 14 days it will transfer and keep it's tax free status.   

Some people have got over £1 million in ISAs by doing exactly this.

wmb194

Allen6061 said:

Hi,

I have a maturing ISA that I want to reinvest in a higherm % rate ISA with another provider. Problem is, I've already used my £20k allowance for this year so want to put it in an ISA in my wife's name.

Can't do it direct as a transfer as the name on both accounts has to be the same.

Can I withdraw it into a savings account of mine, keep the interest then transfer the £20k into an ISA in her name?

Surely it should all be tax free as the initial £20k has been taxed already as earnings back whenever and the interest is tax free?

Plus my wife has retired early, has minimal income therfore nowhere near the £12570 tax threshold.

Thanks in advance. 

To keep the money in the Isa wrapper in your name just transfer it to a new provider using the provider to provider Isa transfer mechanism - initiate the transfer from the new provider. The £20k annual limit is for new deposits. For deposits made in previous years you can transfer them. You don't need to muck around like this.

There's never any tax on Isas or withdrawals from them.

Barkin

Allen6061 said:

Hi,

I have a maturing ISA that I want to reinvest in a higherm % rate ISA with another provider. Problem is, I've already used my £20k allowance for this year 

If it's money from a previous year, and you request the transfer be done by the new provider, it doesn't count against your annual £20k allowance.

slinger2

Transfers don't count towards your £20k allowance, whether it's this year's money or old money.

Ayr_Rage

slinger2 said:

Transfers don't count towards your £20k allowance, whether it's this year's money or old money.

Incorrect.

Transferring this year's money does not get you an extra allowance.

Johnjdc

Ayr_Rage said:

slinger2 said:

Transfers don't count towards your £20k allowance, whether it's this year's money or old money.

Incorrect.

Transferring this year's money does not get you an extra allowance.

Nobody said it gets you an extra allowance. They said it doesn't count towards your allowance. Which is correct.

After the initial subscription for the year, you can transfer your ISA every week if you want.

Nobody is saying that means you have an allowance of £1,040,000, they are saying it would still only count as £20k of subscriptions.

slinger2

It's the initial deposit that uses up the allowance, whenever that was. Transferring an ISA doesn't affect the allowance in any way.