ISA transfer question

2010

DAK, when you transfer money into a new ISA, and then change your mind within the 14 day cooling off period, where does that money go.

Is it back to previous ISA account with your former provider or to your nominated account, which of course is a non ISA.

Woodstok2000

I think it generally goes to the linked account, but youd be best checking with the institution in question.

Being non-isa isn't an issue, as cancelling within the cooling off period means you haven't used your allowance and so you can redeposit the money to a new ISA if that is your aim.

flaneurs_lobster

Being non-isa isn't an issue, as cancelling within the cooling off period means you haven't used your allowance and so you can redeposit the money to a new ISA if that is your aim.

..but what if you transfer (say) £50k of 'old' money from ISA to ISA then change your mind - moving that cash to a non-ISA account would be an issue, no?

friolento

Being non-isa isn't an issue,

It could be a huge issue, depending on the amount and age of the funds transferred in

best checking with the institution in question

definitely

Barkin

Being non-isa isn't an issue, as cancelling within the cooling off period means you haven't used your allowance and so you can redeposit the money to a new ISA if that is your aim.

...unless the transfer value is more than the £20k annual limit…

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/82140671#Comment_82140671

If youre doing that you can just transfer the money back to the old isa, or onwards, you don't need to cancel under the cooling off period. My understanding (and happy to be corrected here) is that cancellation under the cooling off period is specifically for circumstances where you have deposited money into an isa from outside the tax wrapper, and need to get it back out without impacting your allowance.

J63320

I’m assuming you are asking about transferring existing ISA funds, not depositing new money.

Here is my recent experience with Aldermore. I wanted to cancel a fixed rate account, which I had funded by a transfer, within the cooling off period ( I had about 4 days left). I had assumed this meant that they could reverse the transfer, but they told me I could either withdraw the money (i.e. move to nominated account and lose the ISA status) or transfer it to another of their ISAs. I can now see that this makes sense, because transfers have to be initiated by the provider of the new ISA, so the only transfer Aldermore themselves could offer was to another of their own ISAs.

I opted to transfer to another fixed rate ISA at a better rate, but I could have kept my options open (which was actually my reason for wanting to cancel, because rates are rising) by transferring to one of their easy access accounts instead. This would have been a sensible move, because they have already brought out another fixed account with an even better rate. I’ve got a week left to do another transfer. Oh dear, I’m usually quite clued up but I’ve made some mistakes here - and now I’m telling the world! 🤦‍♀️ But at least I’ve learnt something. 👩‍🎓

Maybe, it’s possible to initiate a transfer with another provider, but you’d have to be quick because the cooling off period is normally 14 calendar days and institutions have 15 working days to complete a transfer. Please don’t take this as a recommendation because I’ve no idea how it would work in practice.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82140701#Comment_82140701

Cancellation rights apply to all money received into a new account within the cooling off period.

Cancellation is required if there is a penalty for early withdrawal and you wish to avoid paying it.

When that money comes from a transfer from another ISA, you cannot assume the old provider will be willing to accept a reversal and re-open the old account.

That is why it is important to understand what the provider is willing to do for you to avoid old money losing its ISA status.