ISA transfers: How do you move on?

Are your ISA’s working for you?

Sometimes, having owned your Individual Savings Account (ISA) for a few years, you might notice that the interest or underlying investments no longer give you the return that you need.

You may have built up your cash ISA’s over the years and enjoyed a reasonable rate of interest but have noticed that you no longer make very much based on the amount invested.

Alternatively you may have equity ISA’s but because your circumstances have changed, you might be concerned that they could be at risk of dropping in value or just not understand how they work or if they are right for you any more.

Did you know?

You can switch you ISA provider at any time and also switch between Cash ISA’s and Equity ISA’s. An ISA Transfer will preserve the investment you made in the tax year that you made it and so transferring will not effect your current allowance. Transferring allows you to shop around for the best deal for you and consider a different type of ISA than you already have to suit your current needs.

How can you shift your investment without jeopardising the tax benefits?

You can transfer the value of your ISA to a different provider or fund manager whenever you like. Reforms to legislation have granted much greater flexibility to ISA savers: savings held within a stocks and shares ISA can be transferred to another stocks and shares ISA, or to a cash ISA, and vice versa. Once you have decided on your course of action, you must enact an official transfer using your new Providers or manager’s ‘Transfer Request Form’; closing one ISA and reinvesting the proceeds into another is viewed as a withdrawal and, once you withdraw, you lose all tax benefits on the money removed.

Although transferring is a relatively straightforward process, it is important to remember that any investment – particularly in shares – is likely to be for the long term. Consequently, you need to be sure your existing investment is really not right for you, rather than switching just because of a short-term downturn in markets. Before shifting your portfolio, remember any transfer may incur charges that will need to be weighed up against the potential benefits, so do make sure you seek expert advice first. Most Cash ISA’s can be moved penalty free unless you have opted for a fixed rate so it is important to check first.

If you need help or advice with your Investment planning please contact me, Claire Blake on 07767 308783 or claire@blakefinancialplanning.co.uk or www.blakefinancialplanning.co.uk.