Transfer Cash ISAs Discussion Area

Baldur

JWhite wrote: »

Let me see if I have got this straight. I have £3600 in an ISA from 2008 and wish to open a new ISA with a different provider that allows transfers in. I can take out the new ISA for the full year's allowance for 2009(which in my case from now is £5100 as I am over 50) and transfer in the £3600 from the previous year from the other provider?

Yes, as long as the new ISA provider accepts ISA transfers - just complete their ISA transfer form and they must arrange the transfer.

Does this mean too that the same interest rate will be paid on the whole amount?

Yes.

This is the bit I have never understood. I thought you could transfer in amounts but only up to the current year's allowance, or is this actually the case

I have transferred previous tax years' Cash ISA funds well in excess of £25,000 in the recent past. Transfers have nothing to do with the current tax year's allowance

Leodogger

Thanks Baldur, I have finally managed to clarify that point. I could never understand why everyone kept telling me to transfer money into my current ISA account as I believed I would only get the tax free allowance on the current year's ISA and the rest would be taxed and paid less interest on than the current ISA which didn't seem worth the hassle.

Now I know why people do it ! :T

mr_messy

Forgive my ignorance on this whole issue, but I've searched the main guide and this thread, and I can't find an answer to my (admittedly basic) question!

I have money in an ISA, but can I withdraw it to a current account upon maturity and keep the tax benefits?

I'm sorry!!

Baldur

mr_messy wrote: »

Forgive my ignorance on this whole issue, but I've searched the main guide and this thread, and I can't find an answer to my (admittedly basic) question!

I have money in an ISA, but can I withdraw it to a current account upon maturity and keep the tax benefits?

As soon as funds leave the ISA tax-free 'wrapper' any interest earned on them from that point becomes subject to tax in exactly the same way as if the funds had never been in an ISA.

mr_messy

^^^

So ultimately you cannot get your cash out with the tax benefits? Or can you use ISAs in other ways to use these benefits?

Baldur

mr_messy wrote: »

So ultimately you cannot get your cash out with the tax benefits? Or can you use ISAs in other ways to use these benefits?

As I said above, the inherent tax benefit of Cash ISAs relates to interest earned on funds which are held in an ISA 'wrapper' and is ongoing (at least for as long as the ISA scheme, or any successor, exists).

Tulula_Valzacci

I have recently transferred my total ISA (of several years' accumulation) from Nationwide to Intelligent Finance, in order to get a better rate of interest. It seems though that as soon as you set up one new account, the rate drops and another provider offers a better deal! I was wondering if anyone knew if there was a limit to how often you can transfer your (total) ISA in a year? It does seem to take a couple of weeks or more to complete the process though, so I think the hassle involved (and ? loss of interest earned while the money is in banking limbo - as I assume it doesn't earn interest with anyone until it has cleared in the new account) means it would need to be a really worthwhile change. I am just interested to know that I could change again if I wanted to!

Lokolo

Tulula_Valzacci wrote: »

I have recently transferred my total ISA (of several years' accumulation) from Nationwide to Intelligent Finance, in order to get a better rate of interest. It seems though that as soon as you set up one new account, the rate drops and another provider offers a better deal! I was wondering if anyone knew if there was a limit to how often you can transfer your (total) ISA in a year? It does seem to take a couple of weeks or more to complete the process though, so I think the hassle involved (and ? loss of interest earned while the money is in banking limbo - as I assume it doesn't earn interest with anyone until it has cleared in the new account) means it would need to be a really worthwhile change. I am just interested to know that I could change again if I wanted to!

You can change whenever you want but as you said, you lose out on a couple of weeks of interest.

I find that fixing is best. Find a rate which you like, then fix it, and its done.

boobbby

Tulula_Valzacci wrote: »

I have recently transferred my total ISA (of several years' accumulation) from Nationwide to Intelligent Finance, in order to get a better rate of interest. It seems though that as soon as you set up one new account, the rate drops and another provider offers a better deal! I was wondering if anyone knew if there was a limit to how often you can transfer your (total) ISA in a year? It does seem to take a couple of weeks or more to complete the process though, so I think the hassle involved (and ? loss of interest earned while the money is in banking limbo - as I assume it doesn't earn interest with anyone until it has cleared in the new account) means it would need to be a really worthwhile change. I am just interested to know that I could change again if I wanted to!

Best idea is to place as much as you can afford in a fixed ISA doing a partial transfer from previous years and the remainder in an easy access ISA giving the best rate. You cannot do a partial transfer using this tax year allowance.

MarkyMarkD

This all depends how much money you have spare.

If you have enough to fill up your ISA each year, then your instant access money might as well NOT be in the ISA.

Ideally, you never want to withdraw ISA money as once the allowance has gone, it's gone.