Transfer Cash ISAs Discussion Area

innovate

DonnaKebab wrote: »

So what difference would it make if someone was going to do this, but will be using their full ISA allowance?

Sorry if your question is obvious bit it isn't to me - what do you mean by "someone was going to do this" . What is the "this" you mean?

DonnaKebab

innovate wrote: »

Sorry if your question is obvious bit it isn't to me - what do you mean by "someone was going to do this" . What is the "this" you mean?

Sorry, I should have been clearer:


I have £5.5k in an old ISA (1.6%) and I want to move it to another one that doesn't accept transfers, but has a higher rate. Can I withdraw it myself, ( transfer it into a normal savings account say ), and then move it to the new ISA with the higher rate? When the extra ISA allowance comes into force in July, I will have that extra cash and will using my full allowance. So I was just asking, what difference would it make if I was using my full allowance, as oppose to the previous questioner, who was not.


Hope that's better.

DonnaKebab

I think I've had a brain storm! If I am using up my full allowance for this year, that money will be classed as "new money". I will not have no more allowance to use this year. If I have further money to put away, I do not have that previous years "old money" allowance to use no more so it needs to be thought about more.


Does that make sense?

Archi_Bald

Your allowance for 2014-15 is £15,000. That is all for money you deposit into the ISA.

Nobody will know/care that any of your money came from an ISA if you choose to withdraw from an old ISA and deposit it into your current year's ISA. Any and all deposits you make will count towards your ISA allowance. I.e. if your first deposit into your 2014-15 ISA is the £5.5K from your old ISA, you will have £9,500 ISA allowance left for the year.

If you wish to preserve the ISA status of your £5.5K and use your full £15K allowance this year, you either need to leave the £5.5K where they are, or find a provider that allows transfers in and ask them to transfer your old ISA. The theory also allows you to pay your £15K into the same ISA, but the practice is determined by the T&Cs of the new provider, as well as your view on their interest rates. If you make no deposits into the ISA your £5.5K has been transferred into, you can put up to £15K into a different ISA.

badger09

DonnaKebab wrote: »

I think I've had a brain storm! If I am using up my full allowance for this year, that money will be classed as "new money". I will not have no more allowance to use this year. If I have further money to put away, I do not have that previous years "old money" allowance to use no more so it needs to be thought about more.


Does that make sense?

Not really

Assuming you're only interested in cash ISAs, it would help if you told us:
How much you already have in previous year's ISAs
How much new money you can save this year (to 5 April 2015)

You might gain much more interest by using one or more current accounts, rather than ISAs for all, or some of your savings

alahol2

DonnaKebab wrote: »

Sorry, I should have been clearer:


I have £5.5k in an old ISA (1.6%) and I want to move it to another one that doesn't accept transfers, but has a higher rate. Can I withdraw it myself, ( transfer it into a normal savings account say ), and then move it to the new ISA with the higher rate? When the extra ISA allowance comes into force in July, I will have that extra cash and will using my full allowance. So I was just asking, what difference would it make if I was using my full allowance, as oppose to the previous questioner, who was not.


Hope that's better.

You can move your £5.5k into a new ISA (maximum £5940) immediately.
Come July you will then be able to add another £9.5k to that ISA.

calypso_rhapsody

Just wanted to say what a surprisingly and refreshingly good experience i have just had with Halifax in transferring my mum's ISA into a new one and resolving a 'complaint' relating to last year's transfer which had not been processed in accordance with her instructions. She is over 90 and maybe Halifax gave her especially considerate treatment in view of that but it was a delight to speak to a helpful customer services bloke who sorted it all out in one (admittedly rather long) phone call. And my mum is about £170 better off than she was before the call!

rpb424

Archi_Bald wrote: »

Your allowance for 2014-15 is £15,000. That is all for money you deposit into the ISA.

Nobody will know/care that any of your money came from an ISA if you choose to withdraw from an old ISA and deposit it into your current year's ISA.

I'm in a similar situation where I'm closing an old uncompetitive ISA and for the moment moving the money into an ordinary savings account that pays higher interest than the old ISA. I already have another better rate ISA that I've put cash into this financial year, but this ISA doesn't accept transfers in, so I'm wondering about simply transferring the money from the savings account into this. I know everybody always says 'never, ever, ever, ever move money between ISAs yourself'. But the fact is that losing the tax free status is irrelevant to me since I'll never get anywhere near putting £15k into my ISA this year (either new money, or this old ISA lump sum).

My question is basically is this actually against HMRC rules, and could you get in trouble for doing it, or is the 'never do it' advice only given to stop the unwitting from losing the tax free status?

purplestar133

rpb424 wrote: »

My question is basically is this actually against HMRC rules, and could you get in trouble for doing it, or is the 'never do it' advice only given to stop the unwitting from losing the tax free status?

It's not against HMRC rules, the only problem with it is that you'll lose your tax free status on the money you withdraw from the ISA. But as you say, that's not a problem for you as you won't be reaching the maximum allowance.

Archi_Bald

No need to worry, rpb424. You are not breaking any HMRC rules by doing what you suggest.

The "never ever...." statement has been around for a very long time, when annual allowances were a several times less than they are now, and lots of ISAs with great rates allowed transfers in.

If you never get anywhere near putting £15k into your ISA this year, you might do better to put your money into a few current accounts, such as TSB Plus, Club Lloyds, Santander 123 etc. for now, and decide later whether to put it back into an ISA.