ISA transfer rules

Understanding how to transfer your stocks and shares ISA and what the rules are is well worth learning. Even if you don’t plan on transferring right now, you may want to in future. So it’s worth having an idea about the way it all works.

The ability to transfer your ISA gives you more flexibility with your savings and allows you to find the right platform and type of account for every stage of your life.

How do ISA transfers work?

There are a few different ways you can transfer your stocks and shares ISA. The 2 main options involve transferring to a different platform or changing to another type of ISA.

It’s definitely possible to swap and change your current ISA. But there are a number of rules and restrictions you need to know before you make any moves. Otherwise, it could be a costly mistake. You may risk forfeiting some of the tax advantages if you don’t take the proper steps before going ahead with your transfer.

These are the main points to bear in mind about ISA transfers:

• You can transfer from one provider to another at any time.
• Don’t “close” your old account. Always use the official transfer services. If you withdraw the money out of the ISA and transfer it yourself, you’ll forfeit the tax benefits.
• You’re able to make as many transfers as you like.
• If you want to, you can make a transfer to a new provider and open a new ISA account in the same tax year. But you must keep any new investments below your £20,000 allowance.

What are the rules on stocks and shares ISA transfers?

Here is a complete breakdown of the main rules you need to be aware of before you transfer your stocks and shares ISA:

• You can transfer your savings to the same type of ISA or a different one.
• If you want to transfer money invested during the current tax year, you must transfer all of it.
• For any money invested in past years, you can transfer all or part of your savings.
• Cash ISA providers must let you transfer money out, but they don’t have to allow incoming transfers.
• Sometimes ISA platforms will have a withdrawal penalty. Especially if it’s an ISA with a fixed-term interest rate, so always double-check.
• There can be additional fees put in place by investment funds. So, it may be worth consolidating investments first before transferring.

Why would I consider transferring my ISA?

There are plenty of reasons why you might want to transfer your stocks and shares ISA to a new provider or to a different type of ISA:

• Moving to a cheaper platform.
• Consolidating and combining accounts.
• Choosing to invest more of your money or save more cash.
• Your current provider has poor customer service.
• You want access to a bigger choice of investments.
• Better interest rates elsewhere for your savings.

How to transfer your stocks and shares ISA

If you want to learn the easiest way to transfer your stocks and shares ISA, just follow these simple steps:

1. Think about why you want to transfer. Understanding this will help you choose a new ISA provider that’s right for you.
2. Compare different ISA accounts. Once you know why you want to make a transfer, start taking a look at the different ISA options available that suit your goals.
3. Choose whether to transfer your investments or cash. If you’re happy with your current stocks and shares, you can do an “in-specie” transfer where your investments are re-registered without having to sell anything. Or, if you’d rather select new investments, you can sell the investments and transfer a cash balance instead.
4. Tell your new platform to carry out a transfer. Once you’ve chosen a different place to hold your ISA, you’ll have to ask them to do a transfer and fill out a transfer form.
5. Wait for the transfer completion. The transfer times can vary, especially if your current provider decides to move slowly. But you can follow up on the transfer and once everything is sorted, make sure your new savings payment schedule is up and running.

Can you transfer one ISA to another type?

Yes, this is definitely possible. For example, you can transfer your stocks and shares ISA to a cash ISA and vice versa.

Do you have to transfer to the same provider?

No, you can transfer your ISA to a new platform if you want.

When can I transfer?

You can transfer your stocks and shares ISA at any time during the tax year. There’s no deadline or timeframe you have to complete a transfer by.

How much can I transfer?

You can transfer as much as you like, providing the amount is within your ISA allowance for this year and previous years.

Transfer your stocks and shares ISA into a cash ISA

Once you’ve decided where you want to move your savings, you can sell your investments or transfer existing cash holdings over to a cash ISA with the same provider or to a new one.

Transfer your cash ISA into a stocks and shares ISA

Again, once you’ve selected whether to stick with the same platform or try a new one, you can start a cash transfer. Once your savings have moved, you can decide where to invest your funds. Some stocks and shares ISA platforms will also let you select where you want to invest your cash during the transfer to streamline the process.

How much does it cost to transfer your stocks and shares ISA?

This will depend on your current ISA provider. Some platforms will allow you to transfer out for free, but others will charge a fee. Sometimes, charges will depend on the type of investments you have or if you’ve committed to a fixed interest rate for a time. So, it’s always worth checking first and looking at your specific terms.

Does transferring an ISA count as opening a new one?

No, an ISA transfer doesn’t count as a new ISA subscription.

How long does it take to transfer a stocks and shares ISA?

According to the UK government, ISA transfers should take no longer than the following:

• 15 working days for a transfer between cash ISAs.
• 30 calendar days for stocks and shares ISAs and other types of transfers.

If your transfer is taking longer than this and your ISA provider isn’t playing ball and you’re unhappy with the service, you can contact the Financial Ombudsman Service.

How many times can you transfer an ISA in a year?

Technically, you can transfer your stocks and shares ISA as many times as you’d like in a year. However, you probably won’t want to do this frequently. And, if it takes 30 days for each transfer to complete, 12 transfers would be the maximum you could squeeze in.

Does moving money between ISAs count towards your allowance?

No, it doesn’t. If you’re transferring a stocks and shares ISA from a previous tax year, the balance you’re transferring over doesn’t affect your ISA allowance for the current year. But if, for example, you’ve saved and invested £10,000 during a tax year and make an ISA transfer during the same tax year, you’d only have a £10,000 allowance remaining that year.

Can I transfer my ISA to someone else?

Unfortunately not. The purpose of an ISA is for individual savings. So, you can’t transfer the account or investments over to someone else, even to a close family member (unless you die and your surviving spouse or civil partner has an ISA with the same provider). While you’re alive, you’d have to withdraw all your money and then transfer that to someone else to pay in their own ISA, which means you’d forfeit your tax relief on that money.

Bottom line

Modern technology makes it easier than ever to transfer your stocks and shares ISA or other accounts. With so many providers available, all offering a unique service, you have plenty of choices for transferring your ISA. This could be to another platform or perhaps to a different type of account like a cash ISA.

But before you make any moves and jump ship, double-check the rules that apply to your particular transfer situation. It’s also worth making sure your current platform has no sneaky fees in the fine print.

Frequently asked questions

• Can you merge ISA accounts?

  Yes, if you’ve got multiple ISAs, you can do a transfer, and then merge and combine them into one account. Having all your ISA savings in one place can make things easier to manage and keep track of, along with maximising your compound interest returns.

• What happens if I open 2 ISAs in one tax year?

  This is fine. But, you’re not able to open more than one of each type of ISA in a tax year. So, you could open a cash ISA and a stocks and shares ISA, but you can’t open 2 stocks and shares ISAs.

• Can I transfer any type of ISA?

  Yes, this is definitely possible but the exact rules and process will depend on your individual situation and the type of ISA you’re transferring from and to.