Moving 2023/2024 cash ISA funds to stocks & shares ISA

Last year I put 20k into a cash ISA with a bank. The cash ISA has now increased to approximately £20,500 with interest.

However, I want to move most or all of the funds from my cash ISA before this April and instead put it into a stocks & shares ISA.

Does the accumulated interest of £500 count as being part of the original ISA allowance?

In other words, if I want to move my entire allowance for this year, can I just move £20k or do I also have to withdraw the interest of £500 also? I hope this makes sense.

You can transfer any amount, provided it’s done as a transfer and not withdrawal and deposit. The 20k limit is the max amount you can put into an ISA in a year (i.e. deposit); I don’t believe there is any upper limit for a transfer. And you can do a transfer at any time, so don’t have to do it by April.

I don’t think you can transfer funds from a cash ISA to a stocks & shares ISA? I believe you’re allowed to have to have a cash ISA and a separate stocks & shares ISA as long as the total amount between the two doesn’t exceed 20k. However, I want to change the distribution of funds. The question is, does the interest earned from the cash ISA also need to be withdrawn if I’m putting everything into a stocks & shares ISA?

I’m 99% sure you can transfer a cash Isa into a stocks and shares one which would negate the need to withdraw anything.

Alternatively, you could withdraw £20k, put it in an S&S Isa then withdraw any excess in the new tax year which starts in early April.

I’ve transferred two cash ISAs into freetrade S&S ISA, so definitely doable and without issue.


Correct answer

madness. So if i have a cash ISA with >20K I can transfer the whole lot without using up any annual ISA allowance?..potentially game changing information.

As long as you do a transfer and not a withdrawal you can do any amount i.e if you saved 20k for 3 years so using 3 years allowance you can do a transfer of the 60k and it still stays tax free.

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Yes, and the transfer has no impact on that year’s £20k. It would only be relevant if, say, you put £10k into ISA A and then transferred it to ISA B, you would not then - in the same tax year - be able to use the remaining £10k to deposit into ISA B. But provided you hadn’t contributed to ISA A that year, you could transfer any amount and still have the £20k allowance for ISA B.

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Interesting. I delayed opening a FT S&S ISA by almost a yr thinking i’d already hit my ISA subscription limit for that yr…so that whole time could have transferred the balance. doh

I’m getting pretty decent interest at the moment with my bank and I’m not even sure what I want to invest in. So I’m thinking of just leaving it there and transferring it to a stocks and shares ISA when interest rates drop.