How to Transfer an ISA Without Losing Your Tax-Free Status

Moving an ISA between providers keeps its tax-free wrapper only if you follow the transfer process. Here is how it works, how long it takes and where people go wrong.

Summary

• Money moved by a proper ISA transfer is not treated as a new subscription, so it does not count towards your annual ISA allowance.
• Withdrawing the money yourself is treated as a withdrawal, and you cannot pay it back in without using up your annual allowance.
• Cash ISA to cash ISA transfers should take no longer than 15 working days; other transfers should take no more than 30 calendar days.
• Money paid in during the current tax year must normally be transferred in full, while previous years’ money can be transferred in part.
• Moving a Lifetime ISA to another type of ISA carries a 25% charge unless the transfer happens after your 60th birthday or you have a terminal illness.

Moving an ISA to a new provider can get you a better interest rate, a wider choice of investments or simply fewer accounts to keep track of. The mechanics matter, though, because the same money moved the wrong way loses its tax-free treatment. A proper transfer keeps everything inside the wrapper; a withdrawal followed by a redeposit does not. This guide sets out what to check first, the steps in order and the points where transfers most often go wrong.

Why the Transfer Process Protects Your Allowance

An Individual Savings Account (ISA) is a wrapper that shields savings and investments from UK tax. In the 2026 to 2027 tax year, the maximum you can pay into ISAs is £20,000. When money moves between providers by transfer, it is not treated as a new subscription, so it does not use up any of that limit, regardless of how much you move or when it was originally paid in.

Withdraw the money yourself and the wrapper disappears. Paying it into a new ISA counts as a fresh subscription against your annual limit. Someone who has built up £50,000 over previous years and withdraws £25,000 of it could not pay the full amount into a new ISA, because the deposit would exceed the £20,000 annual allowance and the excess would lose its tax-free status.

The rules give you the right to transfer an ISA whenever you want, and that right must appear in your provider’s terms and conditions. It does not work in reverse: providers are not obliged to accept transfers in, so confirm the new provider will take your type of ISA before you commit. Some providers also make a charge for transfers, and your existing provider may have restrictions of its own.

Step 1: Check Both Accounts Before You Apply

Start with your current provider. Ask three things:

• Charges and restrictions. Some providers charge to transfer an ISA out, and some restrict what can be moved. Cash held in an innovative finance ISA can be transferred, but other investments held in one may not be, so ask specifically about your holdings.
• Notice periods. Transfers involving money in accounts with a notice period can take longer than the standard timescales.
• Your payment history. Money paid in during previous tax years can be transferred in full or in part. Money paid in during the current tax year must normally be transferred in full.

Then check the new provider:

• Whether it accepts transfers in of your type of ISA, and whether it accepts partial transfers, since not all do.
• Any deadline for transferred money to arrive. Fixed rate cash ISAs, for example, often require the transfer to complete within 30 days of opening the account.
• Whether it makes any charge for transfers in.

A few situations need extra care:

• Lifetime ISA. Transfers between Lifetime ISA managers carry no withdrawal charge and there is no limit on the amount, though current year payments must move in full. Transferring a Lifetime ISA to another type of ISA is treated as a withdrawal and carries a 25% charge, unless it happens after your 60th birthday or you have declared a terminal illness.
• Help to Buy: ISA. Moving money out of one affects the government bonus you may receive, so check the position before transferring.
• Flexible allowance. Some providers offer a flexible allowance, which lets you withdraw money and pay it back in within the same tax year without it counting against your limit again. If you transfer an ISA in full, you lose any flexible allowance built up with the old provider. If you want to use it, re-deposit the money into your existing ISA before you transfer.
• Living abroad. You can transfer an ISA even if you are not a UK resident, and you should tell your current provider as soon as you stop being one. Once you are non-resident you generally cannot pay in, with an exception for Crown servants working overseas, such as diplomatic or overseas Civil Service staff, and the spouses or civil partners of those staff. The account stays open and keeps its UK tax relief.

Step 2: Open the New Account and Ask for the Transfer

Apply for the ISA you want at the new provider and say during the application that you want to transfer money in. Many providers require you to open a new account for the transfer rather than letting the money arrive in one you already hold.

Once the application is accepted, the new provider starts the process. You do not close the old account and you do not touch the money yourself. If the new provider offers several ISA types, be clear about which one you are transferring into, because a provider that only offers cash ISAs will hold a stocks and shares transfer as cash on arrival.

Step 3: Fill In the ISA Transfer Form: Who Does What

The new provider drives the transfer. You complete an ISA transfer form, either online or on paper, giving details of the account you are moving, the amount and whether it is a full or partial transfer. Paper forms usually need to be signed and dated, and some providers set a deadline for the completed form to reach them, such as within 30 days of the date on the welcome letter for a new account.

After that, the two providers deal with each other. The old provider must send the money and any investments directly to the new one. If the money is sent to you instead, the transfer counts as a withdrawal: the tax-free wrapper is removed and a withdrawal charge may apply, including the 25% Lifetime ISA charge where relevant.

How Long Each Type of Transfer Should Take

Some providers quote longer for stocks and shares transfers, up to 30 working days in some cases, because different investments take different amounts of time to close down or sell. For investments held in an innovative finance ISA, ask your provider how long the transfer will take.

While the transfer is under way, the account may temporarily disappear from your old provider’s app before it appears at the new one. That is a normal part of the process while the funds move across. Interest on a new cash account starts once the transfer completes.

If the deadline passes, contact your ISA provider and ask what is holding things up. Providers can be busy with transfer applications at peak times, and submitting the same request twice can add further delay rather than speed things up.

Partial Transfers and Same-Year Contributions

Previous tax years’ money can be transferred freely, in full or in part, between cash, stocks and shares and innovative finance ISAs.

Current tax year payments are stricter. Under the standard rules, they must be transferred in full. Rules introduced on 6 April 2024 allow partial transfers of current year money regardless of when it was paid in, but providers can choose whether to offer or accept them, so ask the new provider directly rather than assuming.

Moving money into a Lifetime ISA from another type of ISA brings its own limits. The amount transferred must not exceed the £4,000 annual Lifetime ISA payment limit, and it counts towards that limit rather than the overall ISA limit for the tax year. Partial transfers of previous years’ payments are permitted, but any current year payments must move in full.

What Happens to Investments Held in a Stocks and Shares ISA

A stocks and shares transfer can work in two ways, subject to the terms and conditions of both providers:

• Transfer the investments themselves. The new provider re-registers the holdings, so the investments remain yours and stay invested throughout.
• Sell and transfer the cash. The holdings are sold and the proceeds move as cash. This can suit a planned change of strategy, but the money is out of the market while the transfer completes, and some investments take longer to sell than others.

Transferred investments and cash are not new subscriptions, so neither route affects your allowance. Before moving, compare what each provider charges for holding funds and for dealing, because account charges vary between firms and add to the total cost of owning your investments.

Transfers That Go Wrong and How to Complain

Most problems fall into three groups:

• Delays. If the transfer takes longer than the deadlines above, contact your provider and ask for an explanation and a revised completion date.
• Money paid to you by mistake. If funds reach your bank account rather than the new ISA, tell both providers straight away. The payment has been treated as a withdrawal, so the sooner it is investigated the better.
• Unrequested or pressured transfers. If someone contacts you out of the blue about moving your ISA, be cautious and verify who they are independently before acting. Is a Call From Your Bank Ever a Scam? explains how to check.

If a transfer goes wrong, use the provider’s complaints procedure and keep records of dates, forms and correspondence.

Common Questions About Losing Your Allowance

Does an ISA transfer count towards the annual allowance?
No. Money moved by a proper transfer is not treated as a new subscription, so it does not count towards the £20,000 limit, however large the transfer.

Can money be moved between different types of ISA?
Yes. You can transfer to the same type or a different type, for example from a cash ISA to a stocks and shares ISA. Lifetime ISAs are the exception: moving one into another ISA type triggers the 25% charge described above unless an exemption applies.

Can an ISA be transferred after payments have been made in the current tax year?
Yes, but most providers will require the whole of the current tax year’s payments to move with it. Some may accept a partial transfer of current year money following the 6 April 2024 rule change.

What if you have moved abroad?
You can still transfer the ISA to a new provider while non-resident. The account stays open and keeps its UK tax relief, and you can pay into it once more after returning to live in the UK, subject to the annual allowance.

Next steps

• Five Stocks and Shares ISA Myths That Cost You Money clears up misconceptions about how these accounts work, several of which come up when people move one.
• A Glossary of Fund Fees, from OCF to Account Charges explains the charges to weigh up before moving a stocks and shares ISA to a new platform.
• ISAs Explained: Which Type Suits Your Savings Goal? helps you decide which wrapper the transferred money should end up in.

Questions readers ask