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Can I transfer a cash ISA to a shares ISA and keep the ISA protection/wrapper?

rpb
by rpb 05 February 2010  |  Comments 4 comments  |  Love Love  0 loves

A number of self-invest ISA companies have a sort of cash account that you can keep your money in whilst not invested in shares. Can I take out a cash ISA to secure the tax-wrapper protection and then, when I'm ready, invest that money in shares, etc., and maintain the ISA protection?

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Comments (4)

  • Swarbs
    Love rating 272
    Swarbs posted

    Yes you can transfer a cash ISA to a shares ISA, and keep the ISA protection. Although you cannot transfer a shares ISA to a cash ISA, so make sure that's what you want to do! Most shares ISA providers (Fidelity, L&G, Hargreaves Landsdown etc) will be able to do the transfer for you if you provide them with the details of your cash ISA account.

    Posted on 05 February 2010 | Love Love  2 loves Report
  • manzanilla
    Love rating 410
    manzanilla posted

    Yes, you can but...

    You will find that cash in equity ISAs normally gets a very poor rate of interest. And your ISA provider may start sending you email reminding you that equity ISAs are supposed to be invested in equities, if you are running a large and persistent cash balance in an equity ISA.

    So it's fine to transfer your cash ISA into an equity ISA if you do intend to invest it in equities. But make sure you really want the money in equities, otherwise if you sit with it in cash, you will be getting a poorer rate of return than if you hadn't moved.

    manzanilla

    Posted on 05 February 2010 | Love Love  2 loves Report
  • MikeGG1
    Love rating 804
    MikeGG1 posted

    You can invest up to £3,600 (£5,100 from April or if over 50) in a Cash ISA. If it is a current year's ISA and you want to transfer that to a Stocks & Shares ISA, you have to transfer the whole of your Cash ISA investment to the S&S ISA.

    You would then be able to top up your S&S ISA to the £7,200 (£10,200) limit or you could start another Cash ISA. The original investment counts as if it was a S&S ISA from the start.

    Transfers can take a month, so make due allowance for that when you plan your move.

    Mike

    Posted on 05 February 2010 | Love Love  2 loves Report
  • rpb
    Love rating 17
    rpb posted

    Thanks for all of your help. It sounds like I can start a cash ISA now to lock in the tax advantage for this year's ISA allowance, and then transfer it to a share ISA at my leisure when I'm ready to lock that money away for a bit longer.

    Posted on 08 February 2010 | Love Love  0 loves Report

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