Is it possible to transfer money to a new mini-cash ISA and still invest £7,000 in a new stocks and shares ISA in the same year?
Ian C asks:
Can I transfer a cash mini ISA to another provider to gain a better interest rate and not use the £3,000 allowance for the cash mini ISA but still open a maxi ISA and still have the full £7,000 allowance?
Christopher Wicks, certified financial planner at The Alexander Beard Group, replied:
You may transfer the mini ISA to another provider and as this is in respect of a previous years allowance it will not affect your entitlement for the current tax year. You are therefore allowed to invest £7,000 into an ISA for the current tax year in addition to this.
Of course, if you invest all £7,000 into the same maxi-ISA you will not then be able to add a further £3,000 to a mini-cash ISA. You need to watch out for this.
For example if you have been paying a regular monthly amount and you make a mini Cash ISA contribution even of £20 this will mean that you may not then make a maxi stocks and shares ISA payment. You also need to remember that the full £7000 investment must be invested in a stocks and shares ISA otherwise the interest will be subject to tax deducted at source.
If you have an ISA question, got to www.myfinances.co.uk/ask-the-isa-expert
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