This is a trivial question, but I’m seeing a lot of conflicting information… I opened a Vanguard S&S ISA this year and managed to max it out (yey!).
The question is: can I transfer this ISA to FT? Given that I’m not going to add any more funds to it?
I’m confused by the following in the declaration when I go to open a FT S&S ISA which states
I have not subscribed, and will not subscribe to another stocks and shares ISA in the same tax year that I subscribe to this stocks and shares ISA.
The way I understand it, you cannot open or contribute to more than one ISA of a specific type in any single tax year. So in this case, the transferring to freetrade would not be a problem, but I think you’re not allowed open it until the next tax year because you’ve already opened one this year.
Not quite correct. The ISA rules are about subscribing to an ISA not opening one. Subscribing in this sense means contributing money to an ISA account.
You can open another ISA account, but if you’ve already added money to a previous account in the same tax year (of the same ISA type) then you cannot add money to the new ISA until you have transferred your existing ISA.
Basically
ISA 1 - subscribed to this tax year, added money to it
Open ISA 2 - cannot add money to it yet
Transfer ISA 1 to ISA 2
Once transferred, you can start adding more money to ISA 2 in the same tax year
One thing to note. Closing your existing ISA and moving the money is not a transfer. You must transfer your ISA, not close the account manually.
The subscription info is correct, but it’s also the case that you can’t open more than one of each type in a single tax year.
The OP would have no issues opening a Freetrade ISA then transferring, even if the Vanguard ISA was new.
To put it basically, they lied to you. Presumably to attempt to make it easier to understand and stop people making mistakes. But the legislation does not prohibit opening ISA accounts, it prohibits subscribing to more than one account of the same type.
This might be why there’s always so much confusion around ISAs, in an attempt to correct legislation to make it easier to understand they basically provide bad information, while others say other things leading to a lot of confusion.
1B is the main part about using accounts, where the restriction is only around subscribing to an account. Please correct me if I’ve missed a section that prohibits opening accounts themselves
There are mainly two key parts to an ISA. That you can only subscribe to one of each type in a year; and you can only contribute up to £20k in a year.
There are no restrictions on opening accounts.
If you transfer an ISA for example, what happens is an account is opened for you, and then your ISA is transferred into it. There’s no issue doing this.
Thanks for your comments folks! I’m glad I was not being obtuse and it’s a confusing rule.
I’ve asked the CS team at FT to confirm if it’s ok to do the transfer.
This changes for the new tax year when you’ll be able into more than one ISA of the same kind so long as you stay within the £20k limit.
Hi, Did you get an answer to this from FT? I have the same issue and I can’t see how I can open an ISA without (a) applying to subscribe to a stocks and shares ISA for this tax year (2023/24) and (b) confirming that I have not subscribed to another stocks and shares ISA in this tax year, neither of which I can do.
I have opened an ISA with Freetrade and then transferred over funds from a different broker.
The key is not paying into two ISA types in the same tax year, however a transfer does not count as paying in.
Thanks for your reply. Did you open the Freetrade ISA in the same tax year that you subscribed to the other ISA? How did you open the Freetrade ISA without confirming the 2 points above? This is what I am struggling with in Freetrade’s ISA application process. It does not appear to allow you to continue without confirming those 2 points
I think its the interpretation of the terminology which makes things unclear. Subscribe is in essence to deposit into, opening the ISA does not count as subscribing to one.
As you say to further complicate things the new ISA needs to be opened with Freetrade before initiating the transfer from the other broker.
I would go ahead and open the new ISA with Freetrade confirming those two points, I have no kick back since completing the process.
Hi Stephen,
I did get an aswer and it was ok to transfer the ISA. The terminology used was a bit confusing (just because I’m not familiar with the regulations around ISA accounts). As Mattywallace said above, ‘subscribe’ means to deposit money.
You can transfer the ISA without a problem, but on this tax year, you can only put money (subscribe) in only one ISA. Worth mentioning that this should change the next tar year.
Thanks both. I’ll go ahead and hope it’s all ok