Sometimes, after owning your ISA for a few years, although you find yourself quite happy with the tax breaks and the provider, you might start to notice the underlying investments are no longer giving you what you need. Or you may simply wish to switch to a provider with a wider choice of funds because your circumstances have changed.
How can you shift your investment without endangering the tax benefits?
You are able to transfer the value of your Isa to a different manager at any time. Once you have made your choice, you complete your new manager's ‘Transfer request form’ and it will take charge of requesting the proceeds of your existing plan. However, investors must enact an official transfer. Closing one Isa and reinvesting the proceeds in another is deemed to be a withdrawal and, once you withdraw, you lose all tax benefits on the money taken out. You cannot reinvest and get the tax benefits back unless the amount you have falls within the current tax year’s unused allowance.
Having said that, while transferring is relatively straightforward, you should bear in mind that an investment, particularly in shares, is a long-term decision and your investment is likely to fluctuate. Therefore, make sure your investment is really not right for you, rather than switching just because of a short-term downturn in markets. There are charges involved in any transfer, so these need to be weighed up against the potential gains before shifting your portfolio.
If in doubt regarding transferring your ISA do seek advice from a Pearson Hinchliffe Independent Financial Adviser using the details provided below.Subscribe to our newsletter
Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.