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  • FIRST POST
    • Hashida
    • By Hashida 1st Sep 18, 8:02 PM
    • 4Posts
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    Hashida
    Transferring S&S ISA and introducing new money
    • #1
    • 1st Sep 18, 8:02 PM
    Transferring S&S ISA and introducing new money 1st Sep 18 at 8:02 PM
    Here's my situation: I opened a Wealthify S&S ISA more than a year ago (the previous tax year) and set up a standing order to pay in 200/mth. I decided Wealthify's plan wasn't quite what I had in mind and have applied for a full transfer to Evestor.

    Where will this leave me with my newly opened Evestor S&S ISA? Will I be able to continue paying in 200/mth or will that be against the rules because I have also paid in 200/mth to another S&S ISA this tax year (i.e Wealthify) despite requesting a full transfer with the intention of closing it?

    I was also looking to open a IFISA and have been looking at a few options - not currently sure what the best one to go with is so still researching. From what I understand of the rules, opening and paying into a IFISA this tax year should be fine because I have yet to pay any money into a IFISA?

    I felt like I used to understand ISA rules pretty well but now I find it too complicated. As I understood, it used to be the case you could open one of each type of ISA per tax year but it was never about introducing (or not) new money into the accounts so long as you stayed within the limits.

    Now it seems the restrictions are about the new money you introduce into each type of ISA, which seems unhelpful if you're transferring to a new provider but just so happen to regularly add funds to your ISA?
Page 1
    • masonic
    • By masonic 1st Sep 18, 8:14 PM
    • 10,099 Posts
    • 7,384 Thanks
    masonic
    • #2
    • 1st Sep 18, 8:14 PM
    • #2
    • 1st Sep 18, 8:14 PM
    If you transfer the Wealthify S&S ISA including all of the funds you've paid into during this tax year, then you can continue paying into your new S&S ISA up to the annual limit, which will be treated as the same ISA by HMRC.

    Yes you can have an IF ISA and a S&S ISA and pay into both up to the annual limit.

    The restrictions have always been about new money. There has never been a limit on the number of accounts you can hold with ISA money from previous tax years.
    • Hashida
    • By Hashida 1st Sep 18, 8:27 PM
    • 4 Posts
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    Hashida
    • #3
    • 1st Sep 18, 8:27 PM
    • #3
    • 1st Sep 18, 8:27 PM
    Awesome, thank you masonic. To be completely certain then, is it always the case when you do a full transfer like-for-like (e.g. S&S to a new S&S) that you can keep paying into the new ISA and HMRC will treat it the same or are there any exceptions to that rule?
    • Reed_Richards
    • By Reed_Richards 2nd Sep 18, 7:38 AM
    • 188 Posts
    • 93 Thanks
    Reed_Richards
    • #4
    • 2nd Sep 18, 7:38 AM
    • #4
    • 2nd Sep 18, 7:38 AM
    If you have already opened an S&S ISA with Evestor and paid money into it but meanwhile continued to pay into your Wealthify S&S ISA after 5th April this year then you have broken the ISA rules. If you have applied for a transfer to Evestor but not paid-in any money then it isn't really "open" until the transfer takes place. After that happens you can pay more money into the Evestor ISA.
    Reed
    • masonic
    • By masonic 2nd Sep 18, 8:33 AM
    • 10,099 Posts
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    masonic
    • #5
    • 2nd Sep 18, 8:33 AM
    • #5
    • 2nd Sep 18, 8:33 AM
    Awesome, thank you masonic. To be completely certain then, is it always the case when you do a full transfer like-for-like (e.g. S&S to a new S&S) that you can keep paying into the new ISA and HMRC will treat it the same or are there any exceptions to that rule?
    Originally posted by Hashida
    It is true for any ISA transfer, between ISAs of the same or different types, where the transfer includes current year subscriptions. Ideally the transfer should complete prior to you subscribing to the new ISA, but in any case must complete by the end of the tax year in question.

    If you have already opened an S&S ISA with Evestor and paid money into it but meanwhile continued to pay into your Wealthify S&S ISA after 5th April this year then you have broken the ISA rules. If you have applied for a transfer to Evestor but not paid-in any money then it isn't really "open" until the transfer takes place. After that happens you can pay more money into the Evestor ISA.
    Originally posted by Reed_Richards
    This is technically true, but ISA managers only complete annual returns to HMRC after the end of the tax year in question and even if the sequence of events doesn't quite align with the letter of the rules, the net result is the same.

    The 'disallowed combination of ISAs' rule is there to prevent the situation in which, when the ISA managers complete their annual returns, two ISA managers report holding new subscriptions for the same type of ISA.

    It is a strategy I have used, because S&S ISAs can take quite a long time to transfer (OTOH my last S&S-S&S ISA transfer took about 14 weeks). It is ill-advised to subscribe to, or trade within, a S&S ISA that's in the process of being transferred.

    It is also a strategy others have been advised to use in order to get themselves out of hot water when they have inadvertently broken the 'disallowed combination of ISAs' rule with time to take corrective action before the end of the tax year.
    Last edited by masonic; 02-09-2018 at 8:41 AM.
    • Reed_Richards
    • By Reed_Richards 2nd Sep 18, 11:54 AM
    • 188 Posts
    • 93 Thanks
    Reed_Richards
    • #6
    • 2nd Sep 18, 11:54 AM
    • #6
    • 2nd Sep 18, 11:54 AM
    This is technically true, but ISA managers only complete annual returns to HMRC after the end of the tax year in question and even if the sequence of events doesn't quite align with the letter of the rules, the net result is the same.
    .
    Originally posted by masonic
    HMRC could choose to reject any contributions made to the new ISA before the transfer was complete. They may not have done this hitherto but, as they often say about S&S investments, past performance is no guarantee of what will happen in future
    Reed
    • masonic
    • By masonic 2nd Sep 18, 12:38 PM
    • 10,099 Posts
    • 7,384 Thanks
    masonic
    • #7
    • 2nd Sep 18, 12:38 PM
    • #7
    • 2nd Sep 18, 12:38 PM
    HMRC could choose to reject any contributions made to the new ISA before the transfer was complete. They may not have done this hitherto but, as they often say about S&S investments, past performance is no guarantee of what will happen in future
    Originally posted by Reed_Richards
    No, HMRC could not choose to reject them, because HMRC would not know about them. HMRC only gets a snapshot of the final position at the end of the tax year, which would show one S&S ISA holding all of the subscriptions.

    Contributing to a second S&S ISA prior to initiating a transfer from the first to the second could result in the receiving ISA manager rejecting the subscriptions made directly to the second ISA, which is why it is not advisable to deliberately subscribe to both ISAs before transferring from one to the other.

    After the transfer is in progress, the receiving S&S ISA manager should be able to advise as to whether they will accept a top-up subscription.
    Last edited by masonic; 02-09-2018 at 12:41 PM.
    • Hashida
    • By Hashida 2nd Sep 18, 1:12 PM
    • 4 Posts
    • 0 Thanks
    Hashida
    • #8
    • 2nd Sep 18, 1:12 PM
    • #8
    • 2nd Sep 18, 1:12 PM
    If you have already opened an S&S ISA with Evestor and paid money into it but meanwhile continued to pay into your Wealthify S&S ISA after 5th April this year then you have broken the ISA rules. If you have applied for a transfer to Evestor but not paid-in any money then it isn't really "open" until the transfer takes place. After that happens you can pay more money into the Evestor ISA.
    Originally posted by Reed_Richards
    Thanks for the advice! Wording was potentially unclear in my original post but I am transferring my S&S ISA from Wealthify to Evestor and the new account will only open once the transfer is complete.

    My primary concern was, having already paid money into Wealthify in this tax year, if I would be able to continue paying into my new S&S ISA after the transfer is complete. Thankfully, it sounds like that's fine and is within the rules

    It is true for any ISA transfer, between ISAs of the same or different types, where the transfer includes current year subscriptions. Ideally the transfer should complete prior to you subscribing to the new ISA, but in any case must complete by the end of the tax year in question.


    This is technically true, but ISA managers only complete annual returns to HMRC after the end of the tax year in question and even if the sequence of events doesn't quite align with the letter of the rules, the net result is the same.

    The 'disallowed combination of ISAs' rule is there to prevent the situation in which, when the ISA managers complete their annual returns, two ISA managers report holding new subscriptions for the same type of ISA.

    It is a strategy I have used, because S&S ISAs can take quite a long time to transfer (OTOH my last S&S-S&S ISA transfer took about 14 weeks). It is ill-advised to subscribe to, or trade within, a S&S ISA that's in the process of being transferred.

    It is also a strategy others have been advised to use in order to get themselves out of hot water when they have inadvertently broken the 'disallowed combination of ISAs' rule with time to take corrective action before the end of the tax year.
    Originally posted by masonic
    Thank you! It is very helpful to know how the process works. I can easily myself having made a mistake otherwise and contributing to multiple S&S ISAs (I currently have an account with Fundsmith but wanted to diversify, but was still contemplating adding to it later this year if I had available funds - I now know doing so would break the rules and will avoid it).

    Great advice on avoiding contributing while the transfer is in progress too. I neglected to consider that, but I have cancelled my monthly standing order until such a time that the transfer is complete and my new account is open - then I can start paying into it instead.

    That's has really helped clear up my (mis-)understanding of how ISA rules apply and I really appreciate it!
    Last edited by Hashida; 02-09-2018 at 1:27 PM.
    • masonic
    • By masonic 2nd Sep 18, 1:22 PM
    • 10,099 Posts
    • 7,384 Thanks
    masonic
    • #9
    • 2nd Sep 18, 1:22 PM
    • #9
    • 2nd Sep 18, 1:22 PM
    Thank you! It is very helpful to know how the process works. I can easily myself having made a mistake otherwise and contributing to multiple S&S ISAs (I currently have an account with Fundsmith but wanted to diversity, but was still contemplating adding to it later this year if I had available funds - I now know doing so would break the rules and will avoid it).
    Originally posted by Hashida
    If you want to top up a S&S ISA you hold with Fundsmith, one option is to subscribe to a cash ISA this tax year and then after the end of the tax year you can transfer some or all of it as previous year money to the Fundsmith S&S ISA. This won't stop you from paying new money into your soon-to-be Evestor S&S ISA during this tax year and next.
    • Hashida
    • By Hashida 2nd Sep 18, 1:24 PM
    • 4 Posts
    • 0 Thanks
    Hashida
    If you want to top up a S&S ISA you hold with Fundsmith, one option is to subscribe to a cash ISA this tax year and then after the end of the tax year you can transfer some or all of it as previous year money to the Fundsmith S&S ISA. This won't stop you from paying new money into your soon-to-be Evestor S&S ISA during this tax year and next.
    Originally posted by masonic
    Thank you, that's a great suggestion! I hadn't even thought about that being possible! I'm glad I signed up to ask about this
    • csgohan4
    • By csgohan4 15th Sep 18, 1:37 PM
    • 5,152 Posts
    • 3,277 Thanks
    csgohan4
    just double checking, if I have a S+S isa for 2017/8 up to the max amount, can i open another ISA with an additional 20k for this year?
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
    • masonic
    • By masonic 15th Sep 18, 1:44 PM
    • 10,099 Posts
    • 7,384 Thanks
    masonic
    just double checking, if I have a S+S isa for 2017/8 up to the max amount, can i open another ISA with an additional 20k for this year?
    Originally posted by csgohan4
    Yes, you can open a different ISA of each type every tax year to use your 20k allowance.
    • csgohan4
    • By csgohan4 15th Sep 18, 1:49 PM
    • 5,152 Posts
    • 3,277 Thanks
    csgohan4
    Yes, you can open a different ISA of each type every tax year to use your 20k allowance.
    Originally posted by masonic
    So as an a example if the tax limit remains at 20k, After 5 years one could save 100k worth in isas' and all being Tax free?

    i am new to this and exploring investing into S+S, but given the complexity of using a platform and fund manager and know which funds to invest may be a bit daunting at first
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
    • masonic
    • By masonic 15th Sep 18, 1:55 PM
    • 10,099 Posts
    • 7,384 Thanks
    masonic
    So as an a example if the tax limit remains at 20k, After 5 years one could save 100k worth in isas' and all being Tax free?
    Originally posted by csgohan4
    Only if you are able deposit 20k before the end of each tax year. If you haven't used your 20k allowance by the end of the tax year it is lost and isn't carried forward.
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