How to Transfer a Stocks and Shares ISA Without Losing the Tax Wrapper

To move a Stocks and Shares ISA to a new provider, you must use the ISA transfer process, not withdraw the money and pay it into a new ISA yourself. The new provider arranges the transfer directly with the old one, either as cash after selling your investments, or in-specie, moving the actual holdings across without selling them.

Why the transfer process exists

ISAs are a tax wrapper, not just an account. Money inside an ISA grows free of income tax and capital gains tax, but that protection only survives if the money stays inside an ISA continuously. If you withdraw funds from an ISA and later pay them into a different ISA yourself, HMRC treats that as a fresh subscription, using up your current year's allowance, and any tax-free history on that specific pot is lost.

The official transfer process avoids this entirely. Your new provider contacts your old one directly, and the money or investments move between the two ISA wrappers without ever technically leaving ISA status, so nothing counts against your annual allowance and no tax-free history is lost.

Cash transfer vs in-specie transfer

A cash transfer means your existing investments are sold by the old provider, the resulting cash is sent to the new provider, and you then choose new investments to buy with it. This is simple and works with almost any provider, but it means you are out of the market for a period, and if prices move during that gap you could miss out on a rise, or avoid a fall, purely by chance.

An in-specie transfer, sometimes called a transfer in kind, moves your actual holdings, the specific funds or shares themselves, directly to the new provider without selling them first. This avoids the time out of the market, but it only works if the new provider can hold the exact same investments; many platforms have a more limited range than others, so not every in-specie transfer is possible.

What happens to this year's contributions

If you have already paid into an ISA during the current tax year and want to transfer it, most providers require you to transfer the whole of the current year's subscription as a single unit, rather than splitting it. Money paid into ISAs in previous tax years can usually be transferred in part or in full, at your choice.

This distinction matters if you are trying to consolidate several ISAs opened in different years, since older money is generally more flexible to move than money contributed in the current tax year.

How long a transfer actually takes

Industry guidelines expect cash ISA to cash ISA transfers to complete within 15 working days. Stocks and Shares ISA transfers, particularly in-specie ones involving less common funds or shares, commonly take considerably longer, sometimes several weeks, because the process depends on both providers' systems and on whether the exact holdings are transferable in kind.

If a transfer is taking noticeably longer than the provider's own stated timescale, it is reasonable to chase both the old and new provider directly, since delays are sometimes caused by incomplete paperwork rather than anything more complicated.

Fees to check before transferring

Some providers charge an exit fee for transferring out, either a flat fee or a percentage of the value moved, while others charge nothing. It is worth checking the old provider's exit fee alongside the new provider's ongoing charges, since a lower headline fee at the new platform can be offset by a costly exit charge from the old one.

Fund-specific costs are separate from platform fees. If you are moving via a cash transfer and switching into different funds, compare the ongoing charges of the new funds too, not just the platform fee, since both affect your long-term return.

Before you start a transfer

Have your existing ISA provider's name, account number and approximate value ready, since the new provider will ask for these to initiate the transfer request on your behalf. Decide whether you want cash or in-specie before applying, since some new providers ask you to choose upfront rather than after the transfer has started.

If you are unsure whether your specific holdings can be transferred in-specie to a particular new platform, it is worth checking with the new provider directly before initiating anything, since finding out partway through can add unnecessary delay.

Transferring between different types of ISA

The transfer process also applies when moving between different types of ISA, such as a Cash ISA into a Stocks and Shares ISA, or vice versa, not just between two providers of the same ISA type. The same rule applies: use the official transfer process rather than withdrawing and reopening a new account, to keep the tax-free wrapper intact.

A Lifetime ISA has its own additional rule: it must be transferred in full, since it is not possible to split a Lifetime ISA across two providers, and the government bonus attached to it moves with the transfer. An Innovative Finance ISA, used for peer-to-peer lending investments, is also transferable through the same process, though liquidity constraints on the underlying loans can sometimes extend how long the transfer takes.

A recent change worth knowing about

Savers can now pay into more than one ISA of the same type in the same tax year across different providers, a change from the older rule that restricted new subscriptions to a single provider per ISA type each year. This does not change how transfers themselves work, but it does mean opening a second Stocks and Shares ISA with a new provider while a transfer is still in progress no longer risks breaching the same-type subscription rule the way it once did.

It is still worth checking your total contributions across all ISAs against the overall annual ISA allowance, since that combined limit has not changed, only the rule about which providers you are allowed to use within a single tax year.

If a transfer seems to have stalled

Most transfer delays are administrative rather than a sign of anything wrong: missing signatures, an outdated address on file, or a holding that needs manual pricing before it can be moved in-specie are common causes. Contacting the new provider first is usually more productive than contacting the old one, since the new provider is the party that initiated and is tracking the transfer request.

If a transfer has genuinely exceeded a reasonable timescale with no explanation, both the old and new provider are regulated by the FCA and are expected to handle transfers without unreasonable delay, so a formal complaint to either provider, and ultimately the Financial Ombudsman Service if unresolved, remains an option.

Frequently asked questions

Can I just withdraw my ISA and pay it into a new one myself?

You can, but doing so loses the tax-free wrapper on that money and counts as a brand new subscription against your current year's allowance. Use the official transfer process instead.

Does transferring an ISA use up my annual allowance?

No. A transfer moves money between ISA wrappers and does not count as a new contribution, regardless of how much is transferred.

What is an in-specie transfer?

A transfer of your actual investment holdings, such as specific funds or shares, directly to a new provider without selling them first, avoiding time out of the market.

How long should a Stocks and Shares ISA transfer take?

There is no universal guarantee, but in-specie transfers commonly take several weeks. If it is taking much longer than your provider's stated timescale, contact both providers to check for holdups.