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  • FIRST POST
    • DrAl60103
    • By DrAl60103 15th Apr 19, 9:28 PM
    • 1Posts
    • 0Thanks
    DrAl60103
    Opening and transferring multiple ISAs
    • #1
    • 15th Apr 19, 9:28 PM
    Opening and transferring multiple ISAs 15th Apr 19 at 9:28 PM
    Hi,

    I'm hoping folks can advise me that what I plan to do with my current ISA situation is correct and will not violate any of the rules surrounding maintaining the money I have already invested in Cash ISAs.

    1. I have two cash ISAs from previous years, from different providers, both containing many years significant investments. Both are now underperforming in terms of interest rate (0.5% and 0.75% when 1.39-1.44% instant access should be easy to get).

    2. For the new tax year (2019-20) I have opened and invested the full 20k allowance into a third provider at a competitive rate of 1.4%.

    3. Can I now *also* transfer one of the underperforming ISAs into the new account?

    4. Can I open *another* new ISA and transfer the second ISA into it? I've not seen anyone else in any forum saying they've done something like this. It commonly states you can only open one ISA per year, but my assumption is that this implicitly means to invest new funds, rather than simply transfer existing ISA funds invested in previous years - is this correct, and am I therefore safe to open a second new ISA this year, for transfer only?

    The reason I cannot consolidate all into one ISA is that this will take me over the FSCS coverage limit. I'd hope someone can confirm that what I intend to do is fine.

    Thanks in advance.

    Regards,
    Alan
Page 1
    • bsms1147
    • By bsms1147 15th Apr 19, 9:38 PM
    • 1,959 Posts
    • 3,525 Thanks
    bsms1147
    • #2
    • 15th Apr 19, 9:38 PM
    • #2
    • 15th Apr 19, 9:38 PM
    Yes (providing the one you've already opened allows transfers in at this stage - some won't allow transfers full stop, some have a window of time after which no transfers in are allowed) and yes.
    • bowlhead99
    • By bowlhead99 15th Apr 19, 9:50 PM
    • 8,602 Posts
    • 15,739 Thanks
    bowlhead99
    • #3
    • 15th Apr 19, 9:50 PM
    • #3
    • 15th Apr 19, 9:50 PM

    4. Can I open *another* new ISA and transfer the second ISA into it? I've not seen anyone else in any forum saying they've done something like this. It commonly states you can only open one ISA per year, but my assumption is that this implicitly means to invest new funds, rather than simply transfer existing ISA funds invested in previous years - is this correct, and am I therefore safe to open a second new ISA this year, for transfer only?
    Originally posted by DrAl60103
    The 'commonly stated rule' is a lazy interpretation of the actual rule which is that you can't subscribe into two cash ISAs in the same tax year (unless you have first transferred all the current year money from the first into the second) because all your current year subscription must stay together .

    Your assumption is correct that 'subscribe' means 'contribute new money from outside an ISA'.

    It's perfectly fine to transfer existing 'previous year subscriptions' into a new ISA product. You simply tell the new ISA provider that you don't want to subscribe any new money and would instead like them to go and get your old money to put into your new account using their transfer process.

    So yes, you can create 'new ISA A', subscribe 20k into it, also transfer part or all of the contents of 'previous year ISA X' into it, and also create 'new ISA B', and transfer part or all of the contents of 'previous year ISA Y' into that.

    What you shouldn't do is move any of the contents from one pot to the other via your bank account as if you move money in from 'the outside world' into an ISA during 2019/2020 tax year or it will count as new current year subscriptions and you have already maxed out your current year subscriptions in stage 2 of your example.

    #see post above this for more concise explanation
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