Can I switch my Isa again this year?

By THIS IS MONEY
Updated: 07:52 EST, 19 March 2010

I have already transferred my cash Isa from one provider to another this financial year.

Can I transfer it again to yet another provider? I have not added any cash to it. S.J.M., Oban, Argyll

Simon Moon from This is Money replies: The simple answer is yes, as long as you have not signed up to a deal that locks you in for an extended period.

HM Revenue & Customs say: 'Investors can transfer their Isas from one manager to another whenever they want.

They may transfer their current year Isa subscriptions and any related income and/or all or part of their previous years' Isa subscriptions and any related income.'

You should bear in mind that if the Isa contains subscriptions made in this tax year the entire account must be transferred.

HMRC adds: 'Subscriptions to a stocks-and-shares Isa can only be transferred to another stocks-and-shares Isa.

However, subscriptions to a cash Isa can be transferred to another cash Isa, or to a stocks and shares Isa.'

Such a transfer can have a little-known benefit because where current year subscriptions are transferred from a cash Isa to a stocks-and-shares Isa, the current year subscriptions are treated as if they had been made to the stocks and shares Isa in the first place.

This means that the investor is regarded as never having subscribed to the cash Isa.

Therefore, as long as you stay within the overall subscription limit, you may subscribe to a cash Isa later in the current year with the same or a different manager without breaching the rule that limits savers to one Isa of each type in any tax year.