Switching ISA platforms: can I change funds at the same time?

[Jopo1]

Hi,
I'm going to move my ISA from Charles Stanley to iWeb or Lloyds, but I want to change some of the funds I'm invested in, not just a straight transfer like for like. Can I do this? Or shall I just wait until the transfer is complete and then move my money to some new funds?

Thanks

Jopo

[Chrysalis]

You’ll have to execute the buy and sell separately to the transfer I think.
Your options are a) to make the switch before you transfer, and transfer in specie to iWeb (saves on trading fees as free with CSD) or b) sell what you want to sell, and transfer partially in cash, before making purchases with iWeb. The advantage of the latter method is that transfer of cash can be a lot quicker than in specie transfer, which can take an inordinately long time in my experience. Also I think the exit fees are lower/non existent for cash transfers.

[Jopo1]

Thanks Jabd, I hadn't thought about selling and transferring the cash. That's a good idea!

I've just opened the iWeb account.

Jo

[JohnnyCyclops]

Thanks Jabd, I hadn't thought about selling and transferring the cash. That's a good idea!

I've just opened the iWeb account.

Jo

If you sell an ISA and move the cash then you'll lose the tax protection and have to start over. Not an issue if you can quickly rebuy in the replacement ISA (say it's less than £20k, the current annual ISA contribution limit, and you also don't intend to add more invested cash between now and 5th April 2020 that would take you over £20k) but a problem if you're above this, unless you timed it carefully in late March and early April 2020 when you could re-buy £20k each side of the end/start of the tax years on 5th/6th April, i.e done in short order.

[mc2fool]

Thanks Jabd, I hadn't thought about selling and transferring the cash. That's a good idea!

If you sell an ISA and move the cash then you'll lose the tax protection and have to start over.

You can't "sell an ISA". What you can sell is the investments within an ISA, and then there's the matter of what you do with the cash.

If you withdraw the cash from the ISA then you are right. However you can do an ISA-to-ISA transfer of the cash to another provider, which keeps it within ISA status, and that's what's being talked about.

[tjh290633]

You may find, when you decide to transfer, that you are given the option to transfer "in specie" or in cash.

The first option means that the actual holdings are transfered to your new ISA, the second means that the original ISA manager sells the holdings and transfers the cash.

Don't forget that it is a pull operation, not a push. You have to get the new ISA manager to organise the transfer. The old ISA manager may insist on transferring cash.

TJH

[JohnnyCyclops]

Thanks Jabd, I hadn't thought about selling and transferring the cash. That's a good idea!

If you sell an ISA and move the cash then you'll lose the tax protection and have to start over.

You can't "sell an ISA". What you can sell is the investments within an ISA, and then there's the matter of what you do with the cash.

If you withdraw the cash from the ISA then you are right. However you can do an ISA-to-ISA transfer of the cash to another provider, which keeps it within ISA status, and that's what's being talked about.

Very true. It's been a while since I posted here and am out of practice.

I was, however, following the OP's second post in which they seemed to think it "a good idea!" to sell and transfer the cash (as one of the two options another Fool had suggested, along with in-specie). And my lazy shorthand of "sell an ISA" was a nod in that direction. That aside, the relative size of the ISA funds involved is still relevant, as for a figure under £20k the sell-and-rebuy would appear workable and does not reduce or destroy the tax shelter.

[mc2fool]

I was, however, following the OP's second post in which they seemed to think it "a good idea!" to sell and transfer the cash (as one of the two options another Fool had suggested, along with in-specie). And my lazy shorthand of "sell an ISA" was a nod in that direction. That aside, the relative size of the ISA funds involved is still relevant, as for a figure under £20k the sell-and-rebuy would appear workable and does not reduce or destroy the tax shelter.

You're still misunderstanding. What is being discussed is selling the investments in the ISA and transferring the cash to another provider ISA-to-ISA. Not withdrawing it out of the ISA and then subscribing it to another.

ISA-to-ISA transferring the cash preserves the tax shelter status of the funds and it doesn't matter how much is being transferred, the amount is irrelevant as it's always within an ISA.

If the OP wants to totally sell up and buy some different investments, as long as he's ok with being out of the market for a short while, selling up and transferring the cash would definitely be a good idea, as it's likely to be quicker and less problem prone than transferring investments.

However, the fly in the ointment is that he just wants to change some of the investments then my experience is that the cash in the ISA tends to be transferred last, after the remaining investments.....

[Chrysalis]

Thank you mc2fool for clarifying what I meant - I can confirm I did NOT mean removing the money from the ISA wrapper. That would be foolish indeed!

[XFool]

Only point I'd make is if you want a continuous record of your investments - and it may well depend on the ISA provider you are transferring from - you may need to keep a continual eye on the old manager's account and get regular copies of statements for yourself before they all just vanish into thin air.