Thanks for getting back to me
I'm not intending to break the rules but it is not entirely clear what they are. Sometimes it's better to ask for forgiveness but I prefer to be right.
If the first provider sent a pound because they haven't sold any loans (nothing's moved in the past 3 weeks) then I believe my 20K allowance moves with that pound and all is well.
My gut feel is that this wouldn't be allowed, but I'm not completely sure. I've never seen it mentioned anywhere else.
The original provider's help says: If you want to transfer your ISA to another provider, you must first sell your loans. Remember you can’t sell loans that are late or that are experiencing credit issues.
Any loans that can’t be sold will be transferred over to a new Classic account, and will no longer be eligible for tax-free interest
The rate of sale is maybe 5 or 10% per month so little will be sold in the 30 day HMRC stipulated transfer period. At this point presumably they must make the transfer of the 10% money and put the rest of the loans in my normal account.
Thanks for confirming the wrapper can't move on its own. IE I can't declare the previous ISA a non ISA.
If I can top up the total to 20K with the cash ISA and I can top up after receiving the transfer in from the previous provider, the question remains as to whether I can top up with the new ISA befofe the old is processed/transferred.
That bit seems to be unclear still. If so, that's a cleaner solution
No. You can't contribute new cash (2019/2020 allowance) to two different ISAs of the same type (I.e. Two IFISAs).
Able help reads "If you have subscribed in the current year and an incoming transfer containing current year subscription takes the current year balance in the account above the annual allowance we will place the excess in your standard account."
The only way I can think that this could happen, for there to be a current ISA with Abl, and for there to be an incoming transfer from a current year subscription, is if one has just completed the transfer-in request and topped up to the 20K limit before it has arrived. Ablerate could easily lock new ISA or not open it until the tranfer in is processed but they actually only allow you to start the transfer in process once you have opened a second ISA.
The Cash ISA suggestion is better than sending the ISA to the slow previous provider. Thanks.
it would mean selling my lovely ablerate loans, putting the resulting cash in a cash isa and then transferring that cash ISA back to ablerate so I can buy them all again. I've convinced myself I shouldn't have to do this but may be wrong.
Yes, you are wrong. You can leave the ABLrate IFISA alone and contribute your remaining allowance to a cash ISA. For example, if you've contributed £7k to your old IFISA this year you can put £13k in a cash ISA now, then transfer the £13k cash ISA to your ABLrate IFISA from 6th April 2020.
Abl customer services state: "Your 20k tax free allowance can only be utilised by one ISA per tax year, hence the need to make a transfer if you wish to move your current allowance for this tax year. If the funds you wish to transfer have been deposited in this tax year the full amount will need to be transferred over to your new provider.
For example if you have £5000 currently with FC for this tax year once transferred over to Ablrate you can then make this balance up to 20k."
Logic seems to dictate that:
1. Their original statement of "can only be utilised by one ISA per tax year" should read "one ISA at a time in the current tax year" otherwise it contradicts itself. IE If the allowance is transferred then it is subsequently used by a second ISA in the same tax year. Arguably, starting soon enough, you might transfer more than once, from one ISA to the next and maybe a third during the year (no idea why you'd want to but this is exploring the requirements).
2. As HMRC guidelines define the maximum allowable time to transfer a non cas ISA as 30 days, I shouldn't have to use a cash ISA.
It would take maybe 2-3 months in interest losses and the difference between sale and purchase price on the SM - perhaps £500 losses?
Silly question, why do I have to wait till next FY? I'm using this year's allowance.
Because then it will be a previous year ISA and can be transferred in whole or in part to any ISA you like. You're simply banking the remainder of this year's allowance in a cash is until it can be transferred out.
Not sure I have to wait, from the HMRC Website: Transferring your ISA
You can transfer your Individual Savings Account (ISA) from one provider to another at any time.
You can transfer your savings to a different type of ISA or to the same type of ISA.
If you want to transfer money you’ve invested in an ISA during the current year, you must transfer all of it.
Regarding thinking carefully, I generally do on the high risk stuff but I thought the ISA was pretty low risk as it was with a platform I've used for 6-7 years. I've started half a dozen platforms this year so have been busy
My plan when I took it out was to put most of my money into another investment but that fell through. It's still getting 7.5% so not terrible, just nowhere near Ablerate.
Thanks Ablerate, you're too good so I ditched my other investments and gave you a headache LOL