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ISA Transfer Rules

Rules for Transferring ISAs
Investment Fund Supermarket ISAs

Stocks & Shares ISA

from Fidelity

Allows ISA Transfers
Regular Savings
  • Fund Choice: Choose from over 4,000 investment options, including one of the widest fund ranges in the UK. Capital at risk.
  • Invest From: £25 pm

Stocks & Shares ISA

from Hargreaves Lansdown

Allows ISA Transfers
Regular Savings
  • Fund Choice: Choose from over 2,500 funds, shares, investment trusts and more to build your portfolio. Capital at risk.
  • Invest From: £25 pm

Stocks & Shares ISA

from AJ Bell

Allows ISA Transfers
Regular Savings
  • Fund Choice: Wide range of stocks and shares, over 2,000 funds (unit trusts and OEICs), investment trusts and ETFs. Capital at risk.
  • Invest From: £25 pm

Stocks & Shares ISA

from Interactive Investor

Allows ISA Transfers
Regular Savings
  • Fund Choice: Access 40,000+ UK, US and international shares on 17 global exchanges. Choose from over 3,000 funds. Capital at risk.
  • Invest From: £25 pm

ISA Transfer Rules

The purpose of an ISA is to earn the highest tax-free return possible, so it stands to reason that customers should look to regularly move ISA funds into investment or savings accounts that earn the highest possible rate of return. 

ISA rules have changed recently, so many people have been left confused by the guidelines for the different types of ISAs. However, you could end up losing much of your tax benefits as you are trying to obtain a better rate of return on your money.

To ensure ISA transfers are done correctly and according to guidelines established by the Financial Services Authority, there are a few key points to keep in mind.

Initialising a ISA Transfer

One of the most important rules to follow is: never make a withdrawal from an ISA to put those funds into a different ISA.

This type of transaction counts as a withdrawal rather than a transfer, and you lose your tax shelter benefits in the process.

To initiate a transfer, begin the process at the institution that will be receiving the funds. Once they get your signature on the appropriate paperwork, they can handle the transfer process with your current institution to ensure the funds get moved according to FCA guidelines.

Knowing how to properly transfer ISA funds is an important part of getting the full benefit from your account. With these guidelines in mind, you will ensure the best rate of return on your investment each year, without the worry of losing your tax shelter advantages.

Transferring an ISA has never been easier with some banks offering you interest from day one so you don’t have to worry about delays during the switching process. In case of any delays in your transfer, most branches offer some form of guarantee so that any interest you lose out on is returned.

While ISAs can be straight forward, there are some rules to follow and it’s useful to know before you get started:

What are the Rules?

  • The rules on ISAs have been relaxed since April 2016 and you can now choose how you split your savings. Instead of choosing one ISA, you can split your allowance between stocks and shares, innovative finance as well as cash ISAs
  • Some accounts have penalties if you withdraw early, particularly fixed rate accounts. Be careful to check your provider’s rules as you could leave with less than you invested if you close early
  • You must use a transfer form if you want to transfer accounts. If you don’t follow the transfer procedure and simply withdraw the money yourself then you lose all tax benefits for that year
  • Transferring your ISAs should take no more than 15 days although transferring from a cash ISA to a stocks and shares ISA can take longer

Know Your Account Type

There is typically no penalty for transferring from one ISA to another, but that rule is dependent on the type of account you open in the first place. If your cash ISA is tied to a specific term, you may be assessed a penalty if you withdraw funds before your term is over. Read the fine print of your account agreement carefully to ensure you know when you can transfer ISA funds without problem.

Three funds for a Stocks and Shares ISA

Stocks and Shares ISAs are a popular way for people to invest for their future.

If you’re looking for inspiration on where to invest your ISA this tax year, take a look at our latest investment ideas.

Download your copy to discover three funds, including:

  • A total return fund
  • A global income fund
  • A responsible investing fund

Click here to get your FREE guide from Hargreaves Lansdown »

Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

Lifetime ISAs

Save for your first home and retirement

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Stocks & Shares ISAs

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Latest News

5 Considerations for Your Next Investment ISA

15th March 2021

You've decided to invest your savings into a Stocks and Shares ISA. You'll be using your tax-free ISA allowance for this year before the deadline, while also investing your money for your future. But what do you need to consider before opening an account? We've put together a list of our top five considerations for you to think about before you click "apply". 

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