Under HMRC rules, you can transfer an existing ISA to another provider at any time. Here are ten important things to be aware of when considering an ISA transfer.
1. Transferring between different types of ISA: You can transfer your savings to the same type of ISA (for example: from stocks and shares to stocks and shares) or a different type of ISA (for example: from cash to stocks and shares). Note: If you transfer from a Lifetime ISA to another type before you are 60, you will have to pay a withdrawal fee of 25%.
2. Tax Benefits: Transferring ISAs does not affect the tax benefits. The transferred funds retain their tax-free status, and any interest, dividends, or capital gains continue to grow tax-free within the new ISA.
3. Transfer Process: To transfer an ISA, you need to initiate the transfer with the provider you want to move to. They will ask you to complete a transfer form and provide details of your existing ISA.
4. Provider Restrictions: Although most ISA providers accept transfers, some do not. Many providers will only accept or make transfers in cash, meaning any investments will need to be sold before the transfer. You should check the terms and conditions of your existing ISA provider and the new provider you are considering.
5. Transfer Timing: ISA transfers between cash ISAs should take no more than 15 days. For other types of ISA, the target completion is 30 days.
6. Transfer Limitations: There are no limits on how many times you can transfer an ISA, but be aware that each provider may have its own rules. Check if there are any penalties or charges levied by your existing provider.
7. When you must transfer: You are only allowed to pay into one type of each type of ISA per tax year so if you wish to open another ISA of the same type, you must transfer your existing ISA across.
8. Partial Transfers: If you wish to transfer money you’ve invested in an ISA during the current tax year, you must transfer all of it. For money you invested in previous tax years, you can choose to transfer all or part of your savings.
9. ISA Transfer Deadline: There are no specific deadlines for ISA transfers. However, it is generally sensible to initiate the transfer well in advance of the end of the tax year (April 5th) to ensure it completes within the same tax year.
10. Junior ISA Transfers: Although Junior ISA transfer work similarly, the rules are different in a few ways. Please see our article on Junior ISA transfers for more information.
It's important to review the terms and conditions of your existing ISA and consult with the new provider to understand the specific requirements and implications of the transfer. If you have any questions or are uncertain what to do, please consider seeking guidance from a financial advisor who can provide personalised advice based on your circumstances and investment goals.