UBL UK ISA transfer - need advise

Summerof26

Hello

I can't find this on other threads about UBL.

I sought to transfer old ISA money from a cash ISA (previously a fixed rate ISA with my normal bank).

I did everything through the UBL website which said that the money has to go through into a funding account. So I made a payment (transfer) out of my cash ISA into that funding account.

This now turns out to be a current account. UBL apparently can't shift it from there into their ISA, and my bank can no longer accept it back as ISA because it doesn't have the ISA wrapper anymore.

I can't believe that this happened simply by mistake - and insufficient information from UBL, as I did not know that the funding account is basically a current account, this was not clear from their steps.

Is there anything that can be done to keep it as a ISA, to undo anything, can UBL not change it to their ISA?

Thank you for any advise. I called HMRC who say they can't do anything, my normal bank also says they can't do anything.

refluxer

While UBL do offer current accounts, they wouldn't operate as a funding/holding account for an ISA because, as you've discovered, any money paid into one would lose it's ISA status. It's possible they may require you to link a current account (which could normally be with another bank if you wanted) but this would only be used for adding new ISA subscriptions from the current tax year and wouldn't be required when transferring in funds from another ISA elsewhere.

I've not held an ISA account with UBL personally, but you would normally open the new ISA account and submit a transfer request to UBL so that they can transfer the ISA funds on your behalf whereas it sounds like you've opened the account and withdrawn the money from the old ISA yourself, meaning that it's automatically lost it's ISA status. Even if the money does have to be transferred into a funding account first, this would still require UBL to arrange the transfer.

I doubt there's anything that can be done to rectify this situation unfortunately as it sounds like you might have misunderstood what was required rather than UBL acting negligently. This other UBL account does sound odd though - did they open it alongside the ISA or did you open it separately ?

t0rt0ise

I had a look on the UBL website. They do seem to have a strange system with funding accounts but that seems to be for putting in new money and not for an ISA transfer. The bank always does a transfer for you. If you haven't used your £20,000 limit this tax year you can put that much in as new money.

Summerof26

https://forums.moneysavingexpert.com/discussion/comment/82054649#Comment_82054649

They opened it alongside the ISA, I did not opt in for it, there was no information that it is a current account/account that makes the money non-ISA.

Summerof26

https://forums.moneysavingexpert.com/discussion/comment/82055362#Comment_82055362

I have used this year's allowance already in full. I paid the sum into that isa through mobile banking app of my normal bank.

I was completely unaware, for UBL, that the funding account is a current account that makes the money non-ISA. Why not call it by what it is, why give it a misleading name, it was not clear in the steps when opening the ISA account.

I also tried to make a ISA transfer out to my normal bank from UBL to revert it, but UBL refused it, saying that it is not ISA - but it is their process that made it non-ISA.

I have dealt with several ISA products and never has any issues.

refluxer

https://forums.moneysavingexpert.com/discussion/comment/82056029#Comment_82056029

I've just had a quick read through the UBL Cash ISA product summary and, as mentioned above, that funding account is for paying new subscriptions (from the current tax year ISA allowance) into the ISA account and therefore it doesn't matter that this is not also an ISA account - it is not used for making an ISA transfer (a process which has to be carried out by the ISA providers).

Unfortunately, because you attempted to make the transfer yourself, you've withdrawn the money from the ISA 'wrapper' and therefore it wouldn't matter whether the funding account you transferred it to was an ISA account or not - it would still count again towards the current tax year ISA allowance regardless.

What you should have done is submit an ISA transfer request to UBL, who would have transferred the ISA funds for you and they would have kept their ISA status.

This is the procedure for arranging a transfer-in…

How do I transfer my ISA to UBL UK?

If you wish to transfer your existing Cash ISA to UBL UK, you will need to submit a new ISA application along with the transfer-in form. You can do this online, by post or by visiting our London branch. If you are an existing UBL UK ISA customer and are registered for online banking, you can log in to your account and apply for a new product.

If you would like to transfer your ISA upon maturity, you must ensure that your application is submitted no more than 10 calendar days before the specified maturity date in order to receive the applicable interest rate at the time of your ISA application.

Important note: The ISA transfer process is dealt with in accordance with ISA Regulations. Do not withdraw your ISA yourself or it will lose the tax free status and you will not be able to reinvest that part of your tax-free allowance again.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82056029#Comment_82056029

Even if you could self-transfer directly into the new ISA, doing so would be treated as a withdrawal from the old ISA and subscription of new money to the new ISA. To retain ISA status, the electronic funds transfer must be accompanied by ISA paperwork from the old provider using the Cash ISA Transfer Service messaging system, or the money sent in the post via cheque with a hard copy of this paperwork.

As @refluxer says, all ISA transfers must be done by completing a form and letting the providers arrange it. This is the only way to preserve the ISA status of money from previous tax years. You mention dealing with several ISA products in the past, so presumably you are familiar with how this process worked for those.

There is nothing that can be done now, unless you have evidence UBL advised you incorrectly not to use their transfer process, which seems unlikely (but see https://www.gov.uk/guidance/transfer-an-isa-if-youre-an-isa-manager#cash-withdrawn-in-error-as-a-result-of-incorrect-transfer-advice-by-an-isa-manager if you think you were given incorrect advice).

Summerof26

Update: I got the funds back into my cash ISA with my normal bank. After a lot of phone calls to the ISA team, and UBL bank being helpful in sending the money back, the ISA processing team being informed about my error processed it so as to go back in. What a relief, I absolutely had no idea what to do otherwise to avoid unnecessary tax.

spacewalk

My experience with UBL has been very disappointing and I would urge anyone considering a fixed-rate ISA to be particularly careful.

The maturity arrangements were confusing. What appeared to be one ISA balance could have different maturity dates because deposits were treated separately, and money was automatically rolled into another long fixed-term product. Getting the money transferred elsewhere could then result in an early-withdrawal charge.

I was also surprised that UBL was unable to provide me with a clear record of the interest payments made from my account over several years.

While these arrangements may be included somewhere in the terms and conditions, I found the overall process far from transparent or customer-friendly.

My advice: before opening a UBL fixed-rate ISA, make sure you understand the maturity date of every deposit, exactly what happens when each one matures, and what charges could apply if you want to move your money elsewhere. Keep your own records too.