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Sam, Accountant
Category: Tax
Satisfied Customers: 14197
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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My husband and I have two separate investment ISAs with Scottish

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My husband and I have two separate investment ISAs with Scottish Widows which have now come to the end of the stipulated period. They have written to us to ask us what we wish to do with them. I would like to cash them in and then put the money into a new cash ISA.

1. Would I have to pay tax if I cash them in (I am aware that I cannot transfer investment isa directly into an existing cash isa).

Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer.

No you will not pay tax on cashing them in, as you have completed the agreed period which permits the payouts to be paid free of tax and the end position also.

You advise that you which to use the money to set up further Cash ISAs, just make you sure you are not in excess of the limit permitted for this tax year. And note that you can only have one cash ISA and one stocks are shares ISA - withe the maximum permitted into a Cash ISA of £5940 (and a total investment of £11,880)

I also wish to point out that the permitted amount will change (increase) from 1 July 2014, AND there is then scope to transfer from an Investment ISA to a Cash ISA - which I am surprised that Santander have not advised you of - so you may wish putting off any decision to then.
Also the annual limit then increases to £15,000
Link here with this information
I would urge you to chat with Santander - as there clearly is something amiss with the advise they have offered you, and by cashing in the existing ISA and opening up a new one, this eats into your permitted allowance for the year, where as a transfer does not.



Customer: replied 3 years ago.

Thank you for your illuminating advice. Can both my husband and myself have one of each type of ISA?


Although we have to reply to Scottish Widows by the 15th June, the actual deadline for possibly losing the ISA status is 25th July, which would give us the opportunity to have both transferred to Santander - mine into my existing Cash ISA with them, and my husband's into a new Cash ISA.

Hi Betty

Thanks for your response

Yes you can - one of each per person.

And yes that would give you time to settle the matters, but I would certainly approach Santander now, to ask them re the 1st July 2014 position, as you may then be able to arrange with Scottish Widows that all is completed with the transfer on 2/07/2014 (I am just concerned that sometimes the cogs in the wheels don't always operate in tune with each other!! so get all the pieces in place with a date of 2 July - which meets all time lines)

Do feel free to ask any follow up questions, and if I could trouble you to rate the level of service I have provided, it would be appreciated, as this ensures I am credited for my time



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