Transfer an ISA

• The money you've saved in your current tax year ISA and any related income
• All or part of what you've put into your previous tax years' ISAs and any related income.

If the ISA you wish to transfer only contains subscriptions for the current tax year (plus any returns on that investment) then the entire account must be transferred.

You can only transfer an investment ISA into another investment ISA. However, money you've saved in a cash ISA can be switched to another cash ISA or to an investment ISA.

When an ISA is transferred, the old ISA manager must give the new ISA manager a notice in writing containing information and a declaration (a transfer history form). There are time limits within which the Government has stipulated transfers need to be made. See HM Revenue and Customs for these.
 

Things to think about before you transfer:

• Be careful about just withdrawing money from your ISA because you will lose the tax-free benefits. That's because all funds paid into your ISA throughout the tax year cannot exceed the limit of your annual allowance. Any money taken out of an ISA (withdrawn) can not be paid back in, unless it counts as a 'new subscription', which is subject to the annual limits.
• If you transfer from a cash ISA to an investment ISA you then take the risk that the value of your investment may go down as well as up. Therefore you may get back less than you invested.
• When looking to transfer your ISA, you will need to ensure that you complete an ISA transfer request instruction with the new ISA provider to retain the tax-free benefits.
• Be aware that there's no certainty that the ISA you transfer into will perform as well as or better than your existing one.
• Any cash ISA transferred into an investment ISA cannot be moved back to a cash ISA at a later date.
• If you transfer from a cash ISA to an investment ISA there is a risk that the value of your investment may go down as well as up. Therefore you may get back less than you invested.
• While the transfer takes place, your money will not be invested for a short while and the value of your holding may be affected by any market movements. The value of the investments and the income from it can go down as well as up so you may get back less than you invested. Your old ISA manager may also charge an exit fee for the transfer and be aware that there are no guarantees that the new ISA will perform any better.
• If you're not clear about whether to transfer your ISA, you should seek professional advice before doing so.

There are two options with cash ISAs:

• You can transfer some or all cash saved in previous tax years in a cash ISA to another cash ISA with another provider. You should check that the new ISA will accept ‘transfers in’ first, then simply open a cash ISA with the new provider and complete a Cash ISA Transfer Form.
• Transfer to an investment ISA. If you want to do this, select the investment ISA provider that you want to have your ISA with (this can be your existing provider or a new one). You then ask the investment ISA provider to arrange the transfer. It's a one way process and can't be reversed.

If you want to change ISA managers, complete an ISA transfer form with your new ISA manager that includes details of your current manager and the investments you want to invest in.

The form authorises your current provider to sell your funds and send the proceeds to the new ISA manager without losing any tax benefits. The new ISA manager then invests the proceeds in your new investments.

This keeps the ISA status of your investment intact.

If the money you've put into an ISA in the current year is being transferred from a cash ISA to an investment ISA, it's treated for all ISA purposes as if it had been invested in the investment ISA from the outset.

This means that you're regarded as never having subscribed to the cash ISA. Within the overall subscription limit, therefore, you can subscribe to a cash ISA later in the current tax year (with the same or a different manager) without breaching the one-ISA-of-each-type-a-tax-year rule.

Remember the overall ISA limit for the 2012/2013 tax year is £11,280 and total ISA subscriptions need to be within the overall limit.

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