Transfer cash from one Stocks & Shares ISA to another?

[porqupine]

Can anyone help me with this?

I've about £140,000 in Stocks & Shares ISA1. This includes 40,000 in cash and 100,000 in stocks.
I've another ISA, lets call it ISA2. that contains £23,000 in stocks. I opened this ISA this year with the full subscription of £20,000

The government guarantee limit is £85,000 and I'm a bit concerned that having £140,000 in ISA1 leaves me well over this limit. So can I transfer the £40,000 from this ISA into ISA2 this tax year? Or even the next tax year?

I've read some stuff online and it's not 100% clear but I'm erring towards the view that this can be done.
Any feedback on this much appreciated. thanks

[Midsmartin]

You should be able to. You'll need to complete an ISA transfer form with the provider of the recipient ISA. I'm not sure that all providers will do partial transfers, but at least some do. You can not just withdraw the cash and party or into the other account.

[mc2fool]

Can anyone help me with this?

I've about £140,000 in Stocks & Shares ISA1. This includes 40,000 in cash and 100,000 in stocks.
I've another ISA, lets call it ISA2. that contains £23,000 in stocks. I opened this ISA this year with the full subscription of £20,000

The government guarantee limit is £85,000 and I'm a bit concerned that having £140,000 in ISA1 leaves me well over this limit. So can I transfer the £40,000 from this ISA into ISA2 this tax year? Or even the next tax year?

Welcome to The Lemon Fool.

The simple answer is yes, subject to individual broker's levels of service. As Midsmartin says, you'll need to fill in an ISA transfer form with ISA2 and they will "pull" the money from ISA1.

One point to note that doesn't actually apply in this case, is that while you can transfer as much or as little as you like of "old" money (previous years' subscriptions), you can only transfer all of any "new" money (current year's subscription). So, for example, if you wanted to do it the other way round, you couldn't transfer just £10,000 from ISA2 to ISA1, you'd have to transfer the whole of the £20,000 you put in this year. Or you could wait until the next tax year, at which point that £20,000 becomes "old" money and you can transfer as much or as little of it as you like.

Now, on the FSCS limit of £85,000, it's more complicated than you think. The £85K limit for investments is separate to the £85K limit for deposits, and if your broker is following "best practice" then your £40K cash should be spread and deposited across at least five UK banks, i.e. £8K in each, and if one of those banks goes belly up then your FSCS claim for your £8K is against that bank, and is counted with your other deposits with that bank.

The only time when your cash in a broker is counted in the investments £85K limit is when it is in the broker's hands, in transit before they deposit it into the five banks.

That's how it's supposed to work, at least.

[porqupine]

Cheers guys very helpful. I'm going to commence the process immediately!

[Dod101]

Cheers guys very helpful. I'm going to commence the process immediately!

Can I say that the security of the ISA manager is more important I think than the £85,000 limit. I have only two ISAs and they are both well over the £85,000. I have no insight into how secure each of the managers is but one is with Interactive Investor and the other with HSBC. I do not expect HSBC to go bust nor in fact Interactive and I do not think the trouble of holding multiple ISAs with different managers is worth the effort. I guess though that if you can stay within the £85,000 then why not? Do though be sure that you are happy with the managers themselves.

Dod