IFISAcava
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Post by IFISAcava on Jun 20, 2018 22:41:02 GMT
Not really. AIUI, you still request to transfer your whole IFISA, but only what's already en-cashed can transfer quickly whilst the remainder may take weeks / months / years to go across. That would mean you would effectively have two IFISA containing current year money which isnt allowed under the rules. Unfortunately the full detailed guidance notes arent accessible anymore to reference for such scenarios and the abridged versions are fairly unhelpful. I seem to remember that if you elected to transfer the amount before it was all liquidated, the remaining money stayed on site but left your ISA envelope - at least that's my recollection of one site. Can't remember which one, and my memory may be incorrect.
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IFISAcava
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Post by IFISAcava on Jun 20, 2018 22:47:28 GMT
Which raises an interesting question about ISA transfers generally, and in particular the transfer of "current year" subscriptions, which HMRC says has to be all or nothing. For many P2P ISAs this could be quite problematic, surely? Not really. AIUI, you still request to transfer your whole IFISA, but only what's already en-cashed can transfer quickly whilst the remainder may take weeks / months / years to go across. I think the earlier post from ashtondav is right - if you want to transfer partial amounts because some is stuck, you can't actually do that, so you have to remove some of the money out of the ISA and transfer what is left. So let's say you invested £10K, but £1K is stuck, you transfer the £9K and the £1k is removed into a non-ISA account wrapping. However, I think I am right in saying that you transfer the whole £10K ISA allowance that you used up, and so you can re-invest the remaining £1k back in the new ISA to make it back up to £10K, as long as both are flexible ISAs.
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IFISAcava
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Post by IFISAcava on Jun 20, 2018 22:54:05 GMT
Not really. AIUI, you still request to transfer your whole IFISA, but only what's already en-cashed can transfer quickly whilst the remainder may take weeks / months / years to go across. Unfortunately the full detailed guidance notes arent accessible anymore to reference for such scenarios and the abridged versions are fairly unhelpful. Which is why you transfer the whole ISA allowance and anything left is now non-ISA. If funds do go across later, I think it is simply topping up the missing part of the ISA allowance into the new (flexible) ISA to make it back up to the full amount. That's why the ISA paperwork is so important, because it states how much of the allowance you have used up in this year's ISA. I do stand to be corrected though.
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IFISAcava
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Post by IFISAcava on Jun 20, 2018 23:03:15 GMT
Not really. AIUI, you still request to transfer your whole IFISA, but only what's already en-cashed can transfer quickly whilst the remainder may take weeks / months / years to go across. Fascinating, but scary, especially if you are an ISA administrator who has to pay out dribbles of money for years. All of a sudden I can begin to understand ABL's £100 transfer-out fee!
And then just imagine if, during this time, you transfer your ISA a couple more times. I have visions of tiny lumps of money wandering like lost children from one ISA provider to another trying to find their forever home...
But it can't happen like that - at least for a current year ISA (see my other posts). And you have to elect on past year's ISAs what you do - either an immediate transfer of what's there or wait for the money (all of it or a set amount) to become available before transferring. I don't think they have to keep transferring it unless you send in another transfer form.
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ilmoro
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Post by ilmoro on Jun 20, 2018 23:43:08 GMT
Fascinating, but scary, especially if you are an ISA administrator who has to pay out dribbles of money for years. All of a sudden I can begin to understand ABL's £100 transfer-out fee!
And then just imagine if, during this time, you transfer your ISA a couple more times. I have visions of tiny lumps of money wandering like lost children from one ISA provider to another trying to find their forever home...
But it can't happen like that - at least for a current year ISA (see my other posts). And you have to elect on past year's ISAs what you do - either an immediate transfer of what's there or wait for the money (all of it or a set amount) to become available before transferring. I don't think they have to keep transferring it unless you send in another transfer form. Certainly in the case of outstanding accrued interest that is credited post transfer a follow up transfer of such funds by the previous provider is the correct process (no additional transfer form required) but I'm unsure if that would apply to sums stuck in frozen loans. Interest only becomes part of ISA funds once credited. Not sure about your point of remaining funds coming out of ISA wrapper & being replaceable ... need to delve deeper ... but doesnt sound right.
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Steerpike
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Post by Steerpike on Jun 21, 2018 5:59:34 GMT
I'd like to see a definitive statement from AC (and others) on this subject. Without wanting to come across all huffy on such a fine evening, have you asked customer services for one? No, not yet, I have had a number of exchanges with AC customer services recently and I am having a little rest, thank you.
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walktall7
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Post by walktall7 on Jun 21, 2018 7:02:22 GMT
I suspect the fun will start after July 1 when additional money put in for the bonus starts to be withdrawn some of which is bound to be in ISA accounts
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Steerpike
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Post by Steerpike on Jul 11, 2018 11:13:03 GMT
Did anyone get an answer from AC regarding current year isa that has suspended loans? Yes: As per the terms and conditions “You cannot liquidate loans within an Innovative Finance ISA to fund a transfer out; however, loans within an Innovative Finance ISA can be sold on Assetz Capital’s secondary market, subject to our normal terms and conditions.”
That means if you are in loans that are trading suspended you will not be able to transfer the funds to another ISA provider regardless of if it’s this years or previous years allowance.and: If you have any current year subscriptions tied up in a loan that cannot be sold you will not be able to transfer any current year subscriptions, as these have to be done in whole.
You can transfer prior year subscriptions, for example if you had £100 in total, £20 in a non-sellable loan and £80 uninvested you can submit a partial previous year transfer to transfer £80.
That means that the £20 would remain in our IFISA until the funds are not tied up in loans and could be transferred out.
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Steerpike
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Post by Steerpike on Jul 11, 2018 12:35:12 GMT
So if just 5 pence of this year’s isa remains suspended, I have to wait till 6th April 2019 before I can initiate any transfer to another provider? Edit: Also, I have a 17/18 IFISA *and* a current year 18/19 IFISA with AC all lumped into MLIA. Personally, I think all the suspended loans were in the 17/18 IFISA (makes more sense, they’re older), so I should be able to initiate a transfer, but what does AC think? Surely they must have gone through some of these scenarios when they applied to be able to offer ISAs? ...or given that this is Assetz, possibly .000000000000001 pence or less could prevent current year transfer.
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SteveT
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Post by SteveT on Jul 11, 2018 12:49:50 GMT
So if just 5 pence of this year’s isa remains suspended, I have to wait till 6th April 2019 before I can initiate any transfer to another provider? Edit: Also, I have a 17/18 IFISA *and* a current year 18/19 IFISA with AC all lumped into MLIA. Personally, I think all the suspended loans were in the 17/18 IFISA (makes more sense, they’re older), so I should be able to initiate a transfer, but what does AC think? Surely they must have gone through some of these scenarios when they applied to be able to offer ISAs? I transferred a “current-year” IFISA from FS to Ablrate in 17-18. All available cash should transfer immediately. Anything tied up in selling / suspended / defaulted loans should follow on later, once encashed.
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ilmoro
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Post by ilmoro on Jul 11, 2018 13:10:07 GMT
So if just 5 pence of this year’s isa remains suspended, I have to wait till 6th April 2019 before I can initiate any transfer to another provider? Edit: Also, I have a 17/18 IFISA *and* a current year 18/19 IFISA with AC all lumped into MLIA. Personally, I think all the suspended loans were in the 17/18 IFISA (makes more sense, they’re older), so I should be able to initiate a transfer, but what does AC think? Surely they must have gone through some of these scenarios when they applied to be able to offer ISAs? I transferred a “current-year” IFISA from FS to Ablrate in 17-18. All available cash should transfer immediately. Anything tied up in selling / suspended / defaulted loans should follow on later, once encashed. That would appear to be a breach of ISA rules
'An Investor must either do one or both of the following:
transfer all of the current year’s ISA subscriptions, the investments bought with those subscriptions, and any income arising on those investments (current year account)
In the case of an innovative finance ISA this means that a transfer of the cash is not possible unless all the current year subscriptions are transferred i.e. by liquidating the peer-to-peer loans and crowdfunding debentures or transferring ‘in specie’.'
Im not aware of anything that allows current year subscriptions to be spread across two ISA of the same type. If it was a transfer to another ISA type then the scenario described is allowed. Unfotunately the full ISA Guidance is no longer publically available, including the many examples for various transfer scenarios. Did the IFISA contain previous year funds as well? In which case ISA rules allow for the manager to assume that a certain amount of funds is current year funds without determining the exact loans that current funds are invested in, under such circumstances a transfer of current funds to another IFISA could be made
'If the investor has requested that the current year account be transferred, but that account cannot be identified, it may be regarded as cash and investments whose total value is anywhere between two limits. The two limits are:
the total amount subscribed in the current year plus a reasonable apportionment of any income arising on that subscription (upper limit)
the total amount subscribed in the year less withdrawals in the year, (lower limit). If the withdrawals exceed subscriptions the lower limit is £nil
If the total value of the cash and other investments held in the ISA are less than the lower limit, then all the cash and investments count as current year.
Where an investor wants to transfer all or part of the prior year account, the manager should calculate the lower limit, and subtract that from the total value of the investments and cash in the ISA. Some or all of the remainder can be transferred as a prior years account.
If the total value of the cash and other investments held in the ISA is less than the lower limit, all investments and cash held must be treated as a current year account and there is no prior years account to transfer.'
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SteveT
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Post by SteveT on Jul 11, 2018 13:51:59 GMT
AIUI from my conversation with FS at the time, the IFISA manager guidelines accept that, provided the transfer of the entire IFISA has been requested / instructed, it may take some time for the manager to complete the transfer in full if some loans cannot be sold / redeemed immediately.
I guess it’s just an extension of what happens when a S&S ISA is transferred and then some further dividend / distribution / tax refund appears a month or two down the line.
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Steerpike
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Post by Steerpike on Jul 11, 2018 14:18:07 GMT
In one of the many emails when I was seeking clarification from AC of the AC ISA T&Cs, specifically:
"7.2 You may transfer all (but not part only) of the money in your account in the current tax year, together with all or parts of any funds (together with interest) in your account from previous tax years to another ISA Provider in accordance with the ISA Regulations and these conditions. You will need to contact your other ISA Provider in order to arrange a transfer and you can choose the date funds are transferred subject to us being allowed a reasonable period to implement that transfer. That reasonable period shall not exceed 30 days and shall be consistent with the requirements of the ISA Regulations. However you should note that funds in loans may take longer than this 30-day period to sell, if they can be sold at all, and could cause the transfer to happen outside of the 30 day period as part transfers are not possible."
AC said :
"If any of the funds are still lent out i.e. still in loans then the transfer will have to wait until all funds have been release back into cash. Part transfers are not allowed during the current tax year."
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SteveT
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Post by SteveT on Jul 11, 2018 14:21:37 GMT
Looks like different platforms are interpreting the IFISA manager rules differently. Who'd have thought FS would take a laid-back approach whilst AC adopted the strictest possible interpretation?  HMRC's summary IFISA guidance (dated April 2018) seems to throw the ball back over the fence for the platforms / managers to decide: " Transfers and withdrawals: Transfer and withdrawal rights in relation to non-cash innovative finance ISA investments are available only as set out in the terms and conditions of the account." |
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ilmoro
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Post by ilmoro on Jul 11, 2018 14:59:30 GMT
I really appreciate your help guys, although it would be good to know where the italic text actually comes from ilmoro. It’ll depend on what particular interpretation AC places on the rules. It would seem that the existing rules aren’t really suitable for illiquid assets like P2P.
I suspect, like the transferring loans between non-ISA/ISA accounts, its going to be one of those where platforms interprete the guidance in different ways. What Steve said does kind of remind me of some of the examples relating to S&S (which was going to be my original response to you) but there is a difference between future unpaid interest/dividends/income which could be interpreted as not being invested in an ISA as it as yet unrealised and will be transferred immediately on receipt and investments in loans which are clearly a component of the original subscription.
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