Everything You Need to Know About ISA Transfer Rules
ISA transfer rules can be confusing for savers. In this blog post, we will break down these rules and explain how they work. We will also discuss what you need to know before transferring your ISA to another provider.
What is an ISA transfer?
Moving your savings with an ISA transfer is a great way to take advantage of the tax-free savings wrapper. Transfers can be done on both cash and stocks & shares accounts and can help you benefit from different products or providers.
However, it’s important to remember that funds must not physically move between banks or other organisations – you must contact them yourself to ensure the money stays in its tax-free status.
An ISA transfer can be a simple way to get more out of your savings but always check with the new provider before making any decisions.
What are the main ISA transfer rules?
There are four main rules to consider when transferring an ISA:
- You are never restricted by time when transferring your Individual Savings Account (ISA) from one provider to another – you have the freedom to do it anytime.
- If you’re looking for a change, you can transfer your savings to an alternate type of ISA or reuse the same type.
- If you want to move the money that you have invested in an ISA this financial year, you have to transfer all of it.
- You can opt to transfer all or just a portion of your past investments from previous financial years for the money you have saved.
If you are considering transferring your cash and assets from a Lifetime ISA to a different account, it’s important to be aware of the consequences. There is a withdrawal fee of 25% if this move takes place before you turn 60. This is something that you’ll want to take into consideration when making the decision.
Restrictions on what you can transfer
Making changes to an ISA is easy but there are some restrictions. You can move cash from your innovative finance ISA to another provider, however, not all investments may be eligible for the switch.
To make sure all of your investments can move too, it’s always best to check with your current or prospective ISA provider that they don’t have any specialist, individual limits on transferring from their platform. They may also charge a fee which is worth taking into consideration if you plan to switch providers often.
How to transfer your ISA
Switching to a different ISA provider is easy! All you need to do is complete an ISA Transfer Form with the provider you want to move your investment to. It is important to note that if you withdraw funds from your account without completing the transfer form, then those allowances become taxable and cannot be reinvested according to tax regulations.
To ensure a seamless process, transfers between cash ISAs should take a maximum of 15 working days while other types of transfers should conclude within 30 calendar days.
It is worth following up frequently with either the issuing or receiving provider during an ISA transfer in case any issues crop up. By doing this, investors can rest assured that their investments will be securely transferred.
If you need help, or just some advice, get in touch.
An ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth or income or both. The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
Approved by The Openwork Partnership on 13th March 2023
