ISA maturity confusion

Crunchie1_2

Good Morning

I’ve been reading through as much as I can find on the site but I’m totally confused. I have an Abbey ISA away to 'mature' next week and they sent me a form with 3 options for what to do now, first says to move all into my abbey current account, second says to put part of it to abbey account and move rest to the next ISA with abbey and the third option says to withdraw all of it and lose all associated tax benefits (which I totally don’t understand because if its matured I don’t get why taking it out loses the tax benefits?).

So do you think I should say to abbey to keep what is in excess of the 3.6k with them in their new plan and then move the rest to abbey current account then open a new ISA altogether once I find who’s best and physically put the 3.6k into it? Any help much appreciated – so confused! _pale_

debbie42

I'm assuming this is a cash ISA?

If so, then if you move it into your currnt account, you will also lose the tax shelter.
If you want to keep the cash invested in the ISA tax wrapper, then you should make sure you transfer it to another ISA. You can transfer all the current amount: you don't have to just transfer part of it.

You can switch to another provider if you want, as long as they accept transfers in. You don't have to stick with the Abbey.

Crunchie1_2

Thanks Debbie, yeah it's just that Abbey only give 3 options on their form and they say they need the form back by the 7th of this month so i guess theres no time to do a transfer. Not sure why the tax benefits go when it matures if u put it to a current account because where else could you put it given they effectively chuck it out that day unless you put it back with them? so confusing :sad:

debbie42

What exactly is the product with the Abbey? If you haven't had time to investigate other options, it would make sense to elect for a full transfer into another ISA with Abbey, while you look around. You can still transfer out to another provider then, if you want.

Trying_to_be_good

You should be able to transfer the money to a new Abbey ISA and apply for a new ISA this year - last year's money moving to a new ISA doesn't count as you using up this year's entitlement/limit of £3,600.

Crunchie1_2

ok thanks for your replies :T

jamesd

If you took the money out of an ISA abd put it into a non-ISA account you wouldn't lose the tax benefit for the time it's been in the ISA but you would lose it for the future. You should accept the transfer/move into one of their ISAs option.

Crunchie1_2

but what if I opened a better ISA with another provider and put it from the current account into there, is that not fine for tax?

thanks

jamesd

It must never be out of an ISA, so putting it in the current account first won't work. So put it into their ISA first and then transfer it from there to the best you can find.

Crunchie1_2

does that not count as 2 new ones in the same year though seeing as that would be a new one from them?

Oblivion

Crunchie1 wrote: »

does that not count as 2 new ones in the same year though seeing as that would be a new one from them?

It counts as an ISA transfer, it's just that this transfer is within the Abbey from an old Abbey ISA to a new Abbey ISA. You can open as many ISAs as you want for the purposes of transferring existing ISAs, but you can only put 'new' money up to the annual limit into one ISA in any tax year.

Dave.