Full ISA Guide Discussion Area

Baldur

RefugeeT wrote: »

.....Or will the balance be £2000 and 2011/12 allowance remain at £5340 with my new ISA ?

ISA transfers have no effect upon your annual ISA allowance.

Also could i transfer my shares from 'sharcentre' to a ISA Shares account?

If they qualify to be included in a S&S ISA.

If so will that reduce my 2011/12 limit

Yes, as they are currently not in an ISA wrapper.

Remember that your overall ISA allowance is £10,680 - all of which could be subscribed to a S&S ISA OR up to £5,340 can be subscribed to a Cash ISA, with any remaining balance being eligible to be subscribed to a S&S ISA.

browniej

ellenGB wrote: »

Now I find that my ISAs (both very well known unit trusts)

What funds do you hold with Invesco? Do HL offer that fund?

Isn't there a law agaisnt misleading people about transferring ISAs. I've checked forms and there's nothing in the paperwork. I never asked for a no trail ISA. I had no idea that it would cause problems. Be warned folks.

HL rely on trail commission paid by the provider to the IFA - that's what they use to make their money and how they can offer savings on the annual management charge. If the fund you want to transfer would not pay them trail commission then they either do not carry that fund on their platform or they charge an extra 0.5% to cover it.

Advice from desired destination was to encash the unit trusts and transfer the cash. Not a good time to do that.

That's fairly common practice with S&S ISAs. Some funds you can simply re-register with the new provider and others you have to sell and transfer as cash. The new provider can only accept funds that it carries in their range.

paul234_2

Hello, first post and a bit of a convoluted question I'm afraid.

Currently I have a Cash ISA with Barclays, I haven't added anything this tax year so still have £5,340 I can potentially add. Barclays have released a newer version of the ISA with an interest rate of 3.25% (I believe, unless it's changed while I've been typing).
I also have a non-ISA savings account, again with Barclays.

My question is, can I remove say £2,000 from my current ISA (lets call it ISA A) and place it into my non-ISA account to bring the total therein to about £5,340. Then open the new ISA (ISA at 3.25% and transfer the full £5,340, which is part old ISA money, part normal savings, into the new ISA B?
I'd then like to do a direct transfer of the remainder of ISA A (which is over £5,340) to a Halifax account paying 3%.

Is that kosher?

Thanks in advance.

Baldur

paul234 wrote: »

....can I remove say £2,000 from my current ISA (lets call it ISA A) and place it into my non-ISA account to bring the total therein to about £5,340.

Yes

Then open the new ISA (ISA at 3.25% and transfer the full £5,340, which is part old ISA money, part normal savings, into the new ISA B?

Yes - the funds withdrawn from ISA 'A' cease to be "old ISA money" as soon as they are withdrawn from the ISA wrapper. The whole £5,340 will simply be new money to be subscribed to your 2011/12 Cash ISA.

I'd then like to do a direct transfer of the remainder of ISA A (which is over £5,340) to a Halifax account paying 3%.

Yes, as long as you follow the correct procedure of completing the Halifax ISA transfer form & let them carry out the transfer.

paul234_2

Baldur wrote: »

Yes

Yes - the funds withdrawn from ISA 'A' cease to be "old ISA money" as soon as they are withdrawn from the ISA wrapper. The whole £5,340 will simply be new money to be subscribed to your 2011/12 Cash ISA.

Yes, as long as you follow the correct procedure of completing the Halifax ISA transfer form & let them carry out the transfer.

Thanks very much. I had feared it was too sneaky to be legal.

Baldur

paul234 wrote: »

Thanks very much. I had feared it was too sneaky to be legal.

Not sneaky at all, especially as you will effectively 'lose' the ongoing tax-free benefit of the £2,000 that you withdraw from ISA 'A'.

If you had £2,000 available to subscribe to the new 'Golden ISA' without withdrawing it from ISA 'A', you could earn tax-free interest on the £4,000 rather than just £2,000.

paul234_2

Baldur wrote: »

Not sneaky at all, especially as you will effectively 'lose' the ongoing tax-free benefit of the £2,000 that you withdraw from ISA 'A'.

If you had £2,000 available to subscribe to the new 'Golden ISA' without withdrawing it from ISA 'A', you could earn tax-free interest on the £4,000 rather than just £2,000.

But by using the £2,000 from ISA A to add to £3,340 it'll still have a tax-free benefit won't it, as it's effectively going straight from one ISA to another? Won't it just be at a higher interest rate in ISA B than it would have been in ISA A? Then the remainder of ISA A can be transferred to a higher 3% rather than staying in 2.2%, meaning that overall all my money will have been upgraded to a higher interest rate. What am I missing?

Baldur

paul234 wrote: »

But by using the £2,000 from ISA A to add to £3,340 it'll still have a tax-free benefit won't it, as it's effectively going straight from one ISA to another? Won't it just be at a higher interest rate in ISA B than it would have been in ISA A? Then the remainder of ISA A can be transferred to a higher 3% rather than staying in 2.2%, meaning that overall all my money will have been upgraded to a higher interest rate. What am I missing?

The fact that, if you had £2,000 from another source, you could pay that into your new 'Golden ISA', along with the funds from your non-ISA account, that £2,000 would earn £65 tax-free @ 3.25% over the next year.

Transferring your old ISA funds intact to the Halifax ISA, the £2,000, if not withdrawn, would earn £60 @ 3% - so you could earn £125 tax-free instead of just £65, as per your 'cunning plan'.

KLee

Tony2008 wrote: »

Hello - now this is probably a silly question, but...
I'm a complete novice in financial matters, but finally last tax year I got organised enough to squirrel £3000 away in a cash ISA. Now it's the new tax year, do I need to open a NEW cash ISA to start getting this year's £3600 tax-free allowance, or can I just add to my existing one? I've read the main article, and every word in my existing ISA booklet, but I can't seem to find this. Many thanks,
Tony

I know exactly what you mean Tony. I opened my first ISA in January 2011 and it offered 12 months at a high interest and will go down after 12 months...I think. I used the allowance for 10/11. Now it's the new tax year I'm not sure if I'm allowed to open another ISA as the other one is offering the interest for 12 months. Would it be better to stick with that one? The information doesn't explain it very well does it? If anyone can explain it to me I'd be grateful as I have some money to put away but not sure where it should go

Baldur

KLee wrote: »

I know exactly what you mean Tony. I opened my first ISA in January 2011 and it offered 12 months at a high interest and will go down after 12 months...I think. I used the allowance for 10/11. Now it's the new tax year I'm not sure if I'm allowed to open another ISA as the other one is offering the interest for 12 months. Would it be better to stick with that one? The information doesn't explain it very well does it? If anyone can explain it to me I'd be grateful as I have some money to put away but not sure where it should go

Without knowing which specific Cash ISA you are talking about, noone can advise you, different Cash ISA products have different Terms & Conditions.

For example, one may require you to keep a balance of at least £1 for a full year in order to receive a preferential interest rate, while another may have no such requirement.

In any event, you are perfectly at liberty to subscribe your 2011/12 Cash ISA allowance with any provider (presumably the one offering the best rate) and then transfer your old ISA, when the rate reduces, to the new one (assuming that it accepts ISA transfers) or to any other ISA which accepts ISA transfers.