Transfer and closure of ISA

jelly_pin

I currently have an barclays instant cash ISA with £14,000. I want a fixed rate ISA with barclays instead. If I open a new fixed rate ISA with the minimum £1 and then transfer all the funds over, and close the instant cash ISA. Will this affect the tax free status on the 14,000, and will it contribute to the yearly £20,000 allowance.

Thanks.

refluxer

Transferring from ISA to ISA won't affect your remaining ISA allowance, but you need to use whatever official transfer process Barclays require you to use - it's not always possible to move ISA funds yourself without it ending up counting again towards the allowance (some ISA providers do allow this but not all, so you need to be cautious and avoid doing this until you know the score).

The normal procedure for funding a new ISA with a transfer would be to open the new ISA first and then you're often given funding options as part of the account opening process but if that doesn't happen (or an internal transfer isn't offered at this stage) then, once the new account is open, you can investigate the options from within that account in online banking for doing an internal transfer into it.

Just don't do anything with the existing account until you're happy that you've sussed the proper way an internal transfer can take place. If you're able to request the new account is funded with the whole balance of your existing ISA, then it's common for the old ISA to be closed once the transfer takes place.

You don't need to fund the new account with £1 from your current ISA allowance if the account is being funded with a transfer because the amount you're transferring will more-than cover the account's minimum balance requirement and Barclays will allow time for the account to be funded this way.

Some more info here...

https://www.barclays.co.uk/help/savings-and-investments/isas/transfer-an-isa-in-the-barclays-app/

https://www.barclays.co.uk/help/savings-and-investments/isas/transferisaonline/