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How to transfer a stocks and shares ISA

The recent fee bomb [1] dropped by Interactive Investor has caused many Monevator readers to think about a swift ISA transfer to other investment platforms [2]. We presented our alternative picks here [3] but what about the stocks and shares ISA transfer process itself? How tricky is it?

Well, there are a few things to think about, and because a fair wedge of Monevator readers are monogamous passive investors [4] who don’t break up relationships unless they really have to, let’s do a quick guide to dumping your ISA provider.

How to transfer a stocks and shares ISA [5]

Dear ISA provider… it’s not me, it’s you

The first thing to note is that a stocks and shares ISA [6] can only be transferred to another stocks and shares ISA. That makes it slightly less flexible than a cash ISA, which can be emptied into a stocks and shares ISA if you fancy it.

That established, you have three options for extracting your ISA from the clammy hands of the unworthy:

1. Cash transfer

Your current platform sells your assets and transfers the cash directly to your new ISA provider. You choose new investments from scratch, making this option good for a brand new start, if things have got a little, ah, messy.

2. Stock transfer

The existing contents of your ISA are transferred intact to your new provider. In other words, all your funds and shares are handed over without being sold or repurchased. This type of ISA transfer is often referred to as an in specie transfer, or as re-registration.

3. DIY sell-off

Of course, you can always flog your assets yourself and use the proceeds to open up a new account with another ISA provider.

Stock transfer: The nitty-gritty

Personally, I would use a stock transfer all day long. The annual advance of a market can occur in just a few days and I’d hate myself if I missed out.

However, there are a couple of potential snag-ettes to watch out for with the ol’ in specie manoeuvre:

To do list

If your old provider’s ‘just one last chance’ pleas have fallen on deaf ears and you’ve identified your new dream partner then completing your stocks and shares ISA transfer isn’t much more daunting than filling in a form:

That’s about all you need to know. I’ve got a couple of bullet points left in the tips-gun though so let’s fire ’em off:

That’s it. We’re done. Happy transferring.

Take it steady,

The Accumulator

  1. In other more boring words, the money you had tucked away in the ISA loses its tax protection. [ [11]]