Transfer Cash ISAs Discussion Area

biggoatyman

Hello all, I'm new to this forum so apologies if this question has been previously answered.

I have approx 10k in an ISA account from previous years ISA allowances, paying a rubbish rate.
I have not yet opened an ISA account for this year and do not expect to have any money for this purpose until March next year.
However I would like to transfer the previous years' ISAs into an account paying a better rate now.
Assuming the new provider takes transfers in, can I transfer the previous years ISAs to it without opening a new ISA account for 2009/10 ? The reason for this is that when I do have enough money to open a 09/10 ISA in March, I may want this to be with yet another provider, depending on the best buys at the time.

I hope this makes sense. Any advice greatly appreciated !

Baldur

biggoatyman wrote: »

I have approx 10k in an ISA account from previous years ISA allowances, paying a rubbish rate.
I have not yet opened an ISA account for this year and do not expect to have any money for this purpose until March next year.
However I would like to transfer the previous years' ISAs into an account paying a better rate now.
Assuming the new provider takes transfers in, can I transfer the previous years ISAs to it without opening a new ISA account for 2009/10 ? The reason for this is that when I do have enough money to open a 09/10 ISA in March, I may want this to be with yet another provider, depending on the best buys at the time.

I hope this makes sense. Any advice greatly appreciated !

You have to physically open an account, otherwise there'd be nowhere for your transferred funds to reside after the transfer - just ensure that you pay no new money into it, just the transferred funds via the new provider's ISA transfer form.

You are confusing opening an account for the purposes of receiving your previous tax years' Cash ISA funds and opening a new Cash ISA - which HMRC defines as subscribing new money to a Cash ISA account.

Until you actually pay new money into an ISA account, you will not have a 2009/10 Cash ISA.

biggoatyman

Baldur, that's great. Thanks for clarifying.

MarkyMarkD

Good clarifying Baldur, except for not refuting the concept of "a 2009/10 cash ISA". There is no such thing.

An ISA is simply an account. It can contain ISA funds subscribed in ANY tax year.

It is the idea that there is such a thing as a "2009/10 cash ISA" which gets people confused.

You can open 100 cash ISAs in 2009/10 if you want to. They are just ACCOUNTS.

But you can only SUBSCRIBE to one cash ISA in each tax year. Subscribing is putting new money in.

I know that's what you said, but it helps to be clearer about the fact that an ISA doesn't belong to a particular year - the money does, not the account.

Baldur

MarkyMarkD wrote: »

An ISA is simply an account. It can contain ISA funds subscribed in ANY tax year.

An account isn't an ISA until it is funded with new money, whatever the provider calls it.

It is the idea that there is such a thing as a "2009/10 cash ISA" which gets people confused.

You can open 100 cash ISAs in 2009/10 if you want to. They are just ACCOUNTS.

It's the idea of calling an account which can receive the annual ISA allowance a 'Cash ISA' that is actually confusing - as you say, until they are funded they are not Cash ISAs, merely accounts.

I know that's what you said, but it helps to be clearer about the fact that an ISA doesn't belong to a particular year - the money does, not the account

I thought that we had agreed above that an ISA *IS* the money, not the account?

MarkyMarkD

I don't agree. An account is an ISA if it is defined as an ISA. But there's nothing to stop you opening an infinite number of ISAs. The limits relate to SUBSCRIBING to an ISA, not to opening one.

A cash ISA is one which is defined as investing in cash.

And no, we have not agreed that an ISA is the money. The ISA is the account. But the money within that account may belong to any number of tax years, hence there is no such thing as a "2009/10 ISA", merely an ISA which contains 2009/10 subscriptions.

Blueski4

Hi all,

I'm sure you've heard this question a thousand times before so forgive me if i'm posting in the wrong place. I've scoured various websites, called my bank and still can't get this straight in my head - so apologies for being dense but i'm quite confused now!

BUt my question is this:

If i open a cash ISA this year with the full amount and then transfer these funds to a new ISA next year, are this year's funds ADDED to next year's allowance or do they simply fill next year's allowance?

i.e.

I open a cash ISA this year with the full £3600 allowance, say at 3% (with HSBC). Let's call this Pot A.

Then next year the interest rate on this ISA falls to 1% but a new ISA comes up with 4% (hey who knows...) and I open that account and fill it with another £3600 - Pot B.

What are my options with Pot A next year?

I could leave it where it is with 1% which obviously i don't want. Or can i transfer it to the new 4% ISA? In which case is the value of my funds getting 4% Pot A + Pot B? (assuming all Isa's allow transfers etc)

I kinda assume not as that seems to be good to be true, but it seems to be what some of the banks are saying i can do. Or i'm just not understanding them...

(I'm also under 50 so not getting the 5,100 allowance - but i believe we all get that next year anyway, which is just further heading my head into a spin..)

Again apologies if i've completely got this transferring business wrong.

best
Bluey.

Lokolo

Blueski4 wrote: »

I could leave it where it is with 1% which obviously i don't want. Or can i transfer it to the new 4% ISA? In which case is the value of my funds getting 4% Pot A + Pot B? (assuming all Isa's allow transfers etc)

Yes that is correct.

So in years of starting with ISA:

Year 1(this year): £3,600
Year 2 = Year 1 + Year 1 Interest + £5,100 (allowance goes up next year for everyone)
Year 3 = Year 2 Pot + £5,100

So after 3 years you will have around £15k in ISAs.

But assuming you have not transferred ISAs before its a little different to the convetional log into internet banking and transfer. You have to fill in a form with the new provider. (so the people that are offering the 4%) It then takes a couple of weeks usually (at the beginning of the tax year and end, there are usually quite long delays - a warning!).

Blueski4

Perfect, thank you Lokolo - i'm kinda kicking myself for not sorting this out a few years ago.

For some reason i always assumed each ISA only lasted one year and you couldn't accumulate them together!

all the best
Bluey

dekkard

I have an Abbey Direct (cash) ISA and have paid in £2000 so far this tax year.

I rang them to query the fact that, when I logged in to manage my account, it says onscreen that I can still pay in £3100.

This would only be true if I was going to be 50 or over by 5 April 2010, which I am not.

The Abbey member of staff that I spoke to acknowledged that this is an error, and I assume they will be fixing it.

I thought I would mention this in case anyone else out there has the same issue.