So – in the age of enshittification – how difficult is it to transfer your stocks and shares ISA?
Here’s our quick guide to ditching your ISA provider.
Dear ISA provider… it’s not me, it’s you
Normally you have three options to get your ISA out of the clammy hands of the unworthy:
1. Cash transfer
Your current platform sells your assets and transfers the money directly to your new ISA provider. You’ll be choosing new investments from scratch, making this option good for a brand new start when things have gotten a little, um, messy.
- Your ISAs anti-load armor remains unaffected.
- It should last two to three weeks transfer, but it may take longer.
- You are out of the market once your assets are sold and until you buy back a new batch. That can work out for or against you. Nobody knows.
2. Stock transfer
The existing contents of your stocks and shares ISA will be transferred intact to your new provider. In other words, all your funds and shares are transferred without being sold or redeemed. This type of ISA transfer is often called an ISA transfer in kind transfer or re-registration.
- Again, the tax status of your ISA is not at risk.
- It should take approx four to eight weeks but you know how it goes.
- You remain in Mr Market at all times and are subject to his whims.
- You cannot trade until the transfer is complete.
3. DIY sale
Of course, you can always flog your assets yourself and use the proceeds to open a new account with another ISA provider.
- The tax powers of your ISA are very extensive kyboshed in this scenario.
- Transfer costs are avoided, but perhaps no account closing costs. Also keep in mind that some platforms will pay your transfer fees to secure your business.
- You pay transaction fees to sell and buy again.
- You’re out of the market for a few days.
Share transfer: the heart of the matter
Personal, I would use a stock transfer all day long. A market’s annual push can happen in just a few days and I’d hate myself if I missed it.
However, there are a few potential snags to be careful with the old in specie maneuver:
- Check with your new provider and old provider to make sure they’re both playing ball when it comes to in-specie transfers.
- Check whether the assets in your old ISA are available in your new one. If not, please contact your new provider. Otherwise there are incompatible assets probably sold.
- Different providers’ forms use different terminology to describe an in-specie transfer. Check if you are unsure which box to check and whatever you do, avoid the ‘liquidate’ box.
- Some providers impose a transfer costs per fund or stock line – just one last pound of flesh before you leave. Some new providers pay these costs for you. (Occasionally it can be waived. It never hurts to ask!)
To do list
If your old provider’s ‘one last chance’ pleas have fallen on deaf ears and you’ve identified your new dream partner, completing your shares ISA transfer isn’t much trickier than filling out a form:
- Complete the ISA transfer forms provided by your new platform.
- Ask your new provider whether they will reimburse your switching costs.
- Tell your old provider to close your account once the transfer is complete.
- Cancel your old direct debit and relax.
That’s about all you need to know. I still have a few bullet points left in the tip gun, so let’s fire them:
- Your new platform should tell you when your account has been transferred.
- You can make your Current year ISAalthough new money cannot be added until the transfer is complete.
- Transfers do not count towards your current year’s ISA allowance.
- That’s even possible partially transfer an ISA. Please list the assets you wish to transfer, but note that your old provider may refuse a partial transfer.
- Document all your assets (names, ISIN codes, quantities held) before transferring. Take a screenshot of your assets in your old broker. This will be very useful if any assets are lost during the transfer.
That’s it. We’re done. Have fun switching.
Take it easy,
The accumulation
#transfer #stocks #shares #ISA #Monevator