How to Transfer A Stocks and Shares ISA

Transferring and ISA has never been easier. The ISA transfer forms that I have filled in run to a total of 2 pages. I strongly advise that intelligent investors transfer their ISAs as much as they can get away with. If you don't like something about your provider just transfer to another. Let them fight it out. 

"In Investing you get what you don't pay for" - Jack Bogle 

When thinking about transfering an ISA you have to remember one golden rule: 

"NEVER TAKE MONEY OUT OF AN ISA"

The second you withdraw it from the ISA it's lost its tax advantages. If you take £11,500 out of an ISA and put it into another you can't add any more this tax year. Imagine if you took out £50,000 of the ISA wrapper it would take you 5 years to put it back in. However you can transfer that £11,500 and then pay another £11,500 in as the two are from different tax years.

There are two main ways that you can transfer an ISA without breaking the tax wrapper. The options are to transfer as cash or as stock. Which one you should choose depends on your investments and ISA provider.

Cash Transfer

This is the simplest and fastest way to move an investment. To do a cash transfer you need to:

1. Sell all your existing investments (you will have to pay brokerage fees)
2. Get a transfer form from you new provider 
3. Fill it in and send it off 

Also, ask your new provider if they are willing to refund your brokerage fees. Sometimes you can get away with it... 

Stock Transfer 

This allows you to keep all your existing holdings. Some providers offer a transfer in scheme where they will pay the costs of your transfer but they do come with attached terms and conditions so make sure you read the fine print. 

The process for a stock transfer is similar to the cash transfer. All you need to do is: 

1. Get a transfer form from you new provider
2. Fill it in and sent it to them
3. Your old provider will probably contact you so that you can confirm the transfer - confirm it and agree to the charges. 

A stock transfer is much slower than a cash transfer and can take around 6 weeks.