Four things to remember when transferring your ISA
Getting the most from your ISA is easy as long as you follow these simple rules.
08:26 14 December 2013
There are many reasons for transferring your ISA – perhaps you want to change from cash ISA to stocks and shares, you may have found a better rate elsewhere or you may simply be unhappy with the service you are receiving from your current ISA provider. Whatever your reasons, it is vital that you know the rules to avoid losing out on the benefits accumulated on your current ISA.
- The most important thing to remember when transferring your ISA is to NEVER even consider withdrawing the money from your current ISA. Doing so will result in all of your allowance of tax-free benefits being lost entirely.
- Changing your ISA provider is not as difficult and time consuming as you may have imagined. Cash ISA transfers required to be completed within 15 working days and your new ISA provider will manage the entire process for you. All you need to do is fill in the necessary forms and some ISA providers such as Halifax will even pay interest from the day they receive your completed transfer form, provided your funds are available for transfer.
- If you are considering transferring your money from a cash ISA into a stocks and shares ISA you need to keep in mind that you cannot switch back to a cash ISA without closing the stocks and shares ISA and opening a new cash ISA meaning you would use up some of your allowance for that tax year.
- Finally, you need to know the varying rules regarding whether you are transferring the ISA allowance of this year or the allowance of a previous year. If the money you are moving has been paid into you ISA account during the current tax year it must all be moved into your account with your new ISA provider. If however you are moving money from a previous tax year you have the option to split it between different ISA accounts to get the most from your money.