Transfer Cash ISAs Discussion Area

boobbby

I have a feeling that a certain captain is taking the micky out of those trying to give helpful replies !!

captain_mainwaring

boobbby wrote: »

I have a feeling that a certain captain is taking the micky out of those trying to give helpful replies !!

I think NOT! and I, resent your comment. Why do you say that? I use MSE to gain information. Whether I use it is another matter.

chipp

From a savings perspective, cash ISAs are much more straightforward than many people think.

Each tax year (which runs from 6th April to 5th April) you can invest a certain amount of "new money" - for 2011/2012 (the tax year we are rapidly approaching the end of) it is £5340 and in 2012/2013 I believe it will be £5640. You can add this "new money" to an existing ISA or you can open a new one, either with the same bank or elsewhere, it doesn't matter.

Under the HMRC ISA rules you are not "stuck" with the provider (bank) you initially put your money with. Some providers impose financial penalties if you want to take your money away from them but they are supposed to be "up front" about this so you know before you commit.

Many providers have products that give you a good rate for the first year or so, then it drops like a stone, and that's when you are likely to want to transfer your money elsewhere. So find out the following:

1. Does your existing provider allow a penalty-free transfer-out?

2. Assuming yes, does the provider you want to move the money to allow transfers in?

3. Again assuming yes, apply to the new provider and fill in their forms. That's all you have to do. They have to apply to your old provider for the money, you shouldn't close the account, this will happen automatically once the money has been transferred.

You can do this for all the ISAs you hold. You can transfer multiple ISAs held with different banks all into one if you want, under step 3 you will have to fill in a form for each. You can also split your money, for instance if you have several years worth in one account now earning you peanuts you can transfer chunks of it to different providers - the step 3 form will ask how much you want to transfer in to your new ISA. The only money you can't split is the current year, this has to stay as one "chunk" but you CAN transfer it.

And another important point. If any ISA you hold (current or previous year) allows transfers in you can transfer some or all of your other ISAs into it, you don't have to open a new account to receive a transfer-in, you just need to fill in the forms supplied by the provider you want to move the money to.

Fritz_Wolfgang

I am fairly sure I understand the answer to this, but just need some assurance that this is correct.

I have 2 ISAs that I will probably end up transferring into a single new ISA in the 2012/13 tax year.

As I understand it, I can combine the totals from both ISAs into one new ISA and in addition open up another cash ISA. Is this correct? Does your tax allowance only begin from when you put new money into an ISA.

For example if I take my old ISAs, transfer them into a new one and then add £5k or any amount to the same new ISA then I couldn't open up another new one.
As long as I just transfer old cash into the new ISA and don’t stick new money into it for the tax year, then it doesn’t count as a whole new cash ISA and I’m free to open an additional one and stick up to the full £5340. Is this right?

chipp

Fritz Wolfgang you are absolutely right.

chipp

Something I should perhaps add........

If you don't put any "new money" into an ISA this year this doesn't mean you get double next year. The ISA allowance is a use it or lose it one. But depending on the product you choose, you may be able to "drip feed" at whatever rate you can afford, up to the limit for the tax year.

skaps

I have an isa set up for the new tax year, I wondered whether I can transfer my old isa to this isa after the 5th April?

Lokolo

skaps wrote: »

I have an isa set up for the new tax year, I wondered whether I can transfer my old isa to this isa after the 5th April?

You can transfer ISAs anytime you don't have to do it after the 5th.

You will have to fill in an ISA transfer form with the new provider.

badger09

Lokolo wrote: »

You can transfer ISAs anytime you don't have to do it after the 5th.

You will have to fill in an ISA transfer form with the new provider.

If T&Cs of both 'old' & 'new' ISAs allow. Not all do

Lokolo

badger09 wrote: »

If T&Cs of both 'old' & 'new' ISAs allow. Not all do

The old one will always allow transfer out, it's a requirement of ISAs (obviously there could be penalties for doing so though). But yes, for new, allows transfers in