ISA transfer rules: how to move your money without losing the tax break

Moving money between ISAs is easier than most people expect. You can do it whenever you like, it doesn’t touch your annual allowance, and your current provider can’t stop you.

One mistake undoes all of that: withdrawing the money and paying it in yourself instead of asking for a transfer. Cash that leaves an ISA stops being ISA money, and putting it back comes out of this year’s £20,000.

This covers all four directions — cash into investments, investments back into cash, one platform to another, and shares you already own — plus the rule that changes in April 2027.

The official transfer costs nothing and uses none of your allowance. You open the new account, fill in that provider’s transfer form, and the two firms move the money between them. Your old provider doesn’t need persuading and can’t refuse.

Some ISAs are flexible, which means you can take money out and put it back within the same tax year without it counting against your allowance. That doesn’t help you change provider, and not every ISA is flexible. Don’t use it as a workaround.

The common one. Open the Stocks and Shares ISA first, request the transfer from that side, and buy your investments when the cash arrives. A few weeks, usually.

The step-by-step version is here, including what it costs and what to watch for.

It’s also the only direction that stays open after April 2027, which brings us to the next one.

You can do this now. From 6 April 2027 you won’t be able to.

HMRC’s factsheet on the 2027 reforms confirms that transfers from a Stocks and Shares ISA into a Cash ISA won’t be permitted. Anyone aged 65 or over is exempt, from the start of the tax year in which they turn 65. For everyone else, money can go from cash into investments but not back.

The same reforms put a 22% charge on interest paid on cash held inside a Stocks and Shares ISA, and stop a portfolio made up entirely of money market funds from qualifying at all. The government wants ISA money invested rather than parked, and it has stopped hinting.

One practical point on the mechanics: only cash can be transferred. The investments have to be sold first, so you’re out of the market for however long the transfer takes.

Whether you should do it is a different question. If you need the money within two or three years — a house deposit, a wedding, a bill you already know about — then cash is the right place for it and the deadline matters to you.

If you’re selling because the market has fallen, you’re turning a paper loss into a real one, and after April 2027 you won’t be able to move it back.Moving to a different platform

Same type of ISA, different provider. You get a choice about how.

In specie means the investments move across as they are. Nothing is sold and you stay invested throughout. Ask for this if the new platform can hold your funds.

A cash transfer means everything is sold, the money moves, and you buy again at the other end. Sometimes there’s no choice: a platform’s own-brand funds usually can’t move anywhere else.

In specie is the better option wherever it’s available.

You can’t put shares you already hold straight into an ISA. The only route is to sell them and buy them back inside the wrapper, which platforms call Bed and ISA and usually handle as a single instruction.

Three things happen when you do:

Company share schemes are the exception. SAYE and share incentive plan shares can go in without being sold and without a capital gains charge, but only within 90 days of exercising the option, and they still use the £20,000 allowance.

Sheltering a holding you intend to keep is usually worth a tax bill inside the allowance. It just isn’t free, which is what “transfer into an ISA” makes it sound like.

Partial transfers are allowed, and since April 2024 that includes money paid in during the current tax year.

So you can move £8,000 of a £30,000 Cash ISA and leave the rest, or split one old ISA across two new ones.

Two caveats. Some providers insist current-year money moves in full — that’s their policy rather than an HMRC rule, so ask. And Lifetime ISAs genuinely do have to move current-year money in one piece.

If it drags, chase the new provider rather than the old one. They’re the side that wants your money.

Most people have more in cash than they need and less invested than they should. The 2027 rules are the government saying the same thing, less politely.

If that’s you: open a Stocks and Shares ISA, transfer the cash across, buy one low-cost index fund, set up a direct debit. That’s the whole method, and it’s where my own money is.

I am not a financial adviser. Nothing here is personal financial advice. This is my own experience and opinion, shared for information and education. Tax rules change and depend on your circumstances. Investing involves risk and you can lose money. Please do your own research before acting.

Yes, and it doesn’t touch your £20,000 allowance. Open the Stocks and Shares ISA first, then fill in that provider’s transfer form and let the two firms move the money between them. Never withdraw it yourself — cash that leaves an ISA loses the tax break permanently.

Yes, but only until 5 April 2027. From 6 April 2027 HMRC will not permit transfers from a Stocks and Shares ISA into a Cash ISA, unless you are 65 or over. Your investments have to be sold first, because only cash can be transferred.

Not directly. You have to sell them and buy them back inside the ISA, which platforms offer as a “Bed and ISA” instruction. The sale counts for capital gains tax above the £3,000 annual exempt amount, and the repurchase uses your ISA allowance. Shares from an SAYE or share incentive plan are the exception: they can go in directly within 90 days of exercising the option.

Yes. Partial transfers are allowed, and since April 2024 that includes money paid in during the current tax year. Some providers still insist current-year money moves in full as a matter of their own policy, and Lifetime ISAs are a genuine exception where it must.

Cash ISA to Cash ISA should complete within 15 working days. Other transfers, including cash to investments, are expected within 30 calendar days. If it drags, chase the new provider — they are the side that wants your money.