Hi all
OK so I understand that you can only take one cash isa out each year upto
3000. At the end of that year, what happens? Does the original isa keep running and earning good interest and you take another out for a further 3000max? Should the original isa capital and/or interest be re-invested or just left?Any advice/good links appreciated
TIA
Phil
The original investment account keeps running within its ISA wrapper, which continues to keep it tax-free. You can then add the new year's money into it, or start a new account elsewhere as you choose. If you think the new one's likely to perform better than the earlier you can transfer the old investment into the new account, or vice versa, or leave them to grow separately.
Best of luck!
Matti
"Matti Lamprhey" wrote
Thanks Matti that all makes sense now.
Phil
But remember that if you decide to move your ISA from one provider to another, don't do it by encashing it and then trying to re-invest it. If you do, you're effectively starting with a new ISA allowance which may already have used that year. You do it by using a form from the new ISA provider which they send to the old one telling it to make the transfer. That way you don't lose that ISA allowance.
Rob Graham
Believe it may go up in the next tax year.
Depends on the interest rate and if there are any exit or entry penalties for transferring. The real benefit is from long term roll- up of interest.
Yes. Whether or not it earns good interest of course depends on the provider.
Interest should be credited to the ISA account. It doesn't count as part of your £3k limit.
"Rob graham" wrote
Thanks Rob I did not appreciate this point.
Phil
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