Barclays 07/08 Tax Beater ISA – Transferring Out Questions

jay213

I opened up my first ISA last year, which was a Barclays 07/08 tax beater isa for the 07/08 tax year with a cheque for the full amount of £3000 (in branch 4/4/07, although my account wasn’t opened until 23/4/07 according to statement, can I still ask them to back date to the beginning of the tax year or is it to late?),

Anyway as their bonus of 1% is going to finish this tax year I want to transfer out to another isa account, probably icesave.

If I transfer out of Barclays 07/08 will I keep all the current interest for this year? Are their any penalties? I want the new one to start for 08/09.

When I transfer my current isa balance and interest into the new isa, will I also get interest on this money as well as being able to put in a further £3600 on top and then getting interest on this too? e.g. I will get interest on £6600(& what ever the interest was for 07/08) in 08/09 tax year?

When should I get all this transferring processes done by? Right away or wait until beginning of April to get full interest?

10_66

If you transfer out, Barclays will add interest up to when they transfer the funds to your new provider. There are no penalties with the Tax Beater ISA, you can transfer out whenever you wish. You will then start to earn interest on the transferrred funds with the new provider. Then in the new tax year you can either add to the ISA you transferred (unless you transfer to a fixed rate one, when they usually don't allow you to add to them once opened), or you can open another ISA with another provider. You will then start to earn interest on that in addition to the one you already have.

jay213

thanks for the advice, this isa stuff has slipped my mind. I just want to double check.

1]If i do a transfer request for this tax years 07/08 isa, will I have to re-open another ISA for 08/09 with the company i transfer to or does it just continue from 07/08 to 08/09?

2]what I think would perfer to do would be to do the transfer/switch in the 08/09 tax year if possible? are there any disavantages to this ?

3]if I did the transfer in the new tax year would I be able to then add the 08/09 allowance on top. e.g £3600 during the 08/09 tax year?

10_66

1) You could either add 08/09's contribution to the one you transfer to (providing the ISA you transfer to permits transfers in), or open another one elsewhere. Not sure, but it may be too late to transfer now.

2) There aren't any disadvantages of waiting until the new tax year, now, to transfer to another provider. Don't leave it too long after the anniversary date of when you opened your Tax Beater, only because you'll benefit sooner from a higher rate of interest elsewhere.

3) If you transfer your existing (07/08) ISA in the new tax year, you'll still be able to add/open a new one for 08/09, as funds from previous years' ISA's don't affect the new year's contribution. Depending on what type of ISA you transfer to, you may not be able to add to it (i.e., usually fixed rate ISA's don't allow additions once opened).