ISA. Withdraw cash from the previous year

Hi,

I am new to ISA and I have a simple question. If right at the begin of the new isa year, I withdraw some cash saved from the previous year, is it taken out from the allowance of the year that just started, even if I didn't put any money yet?

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  • Eco_Miser
    Eco_Miser Posts: 4,708
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    No. Withdrawals are completely irrelevant to how much you can put in.
    Eco Miser
    Saving money for well over half a century
  • bowlhead99
    bowlhead99 Posts: 12,295
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    edited 5 March 2015 at 5:26AM
    nig3d wrote: »
    Hi,

    I am new to ISA and I have a simple question. If right at the begin of the new isa year, I withdraw some cash saved from the previous year, is it taken out from the allowance of the year that just started, even if I didn't put any money yet?
    There is no allowance for how much you can take out of an ISA. You can always take out as much as you fancy, if the product allows withdrawals.

    There is an allowance for how much you can put in. HMRC doesn't limit how much you took out. You can take out £1 or you can take out £100,000, it doesn't change the fact that you can put £15k in during any one tax year (the £15k increases a bit for 2015/16).

    If you take money out when you haven't put any in, it clearly reduces the size of the 'previous years' pot of money. If all your money is with one provider, at any point in time there is two virtual pots: "current year money" and "all previous years' money". If you transfer balances between providers then all "current year money" must stay together, while "previous year money" can be split across providers.


    *edit: ah, seems Eco Miser already replied, and more concisely!
  • dunroving
    dunroving Posts: 1,881
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    bowlhead99 wrote: »
    There is no allowance for how much you can take out of an ISA. You can always take out as much as you fancy, if the product allows withdrawals.

    There is an allowance for how much you can put in. HMRC doesn't limit how much you took out. You can take out £1 or you can take out £100,000, it doesn't change the fact that you can put £15k in during any one tax year (the £15k increases a bit for 2015/16).

    If you take money out when you haven't put any in, it clearly reduces the size of the 'previous years' pot of money. If all your money is with one provider, at any point in time there is two virtual pots: "current year money" and "all previous years' money". If you transfer balances between providers then all "current year money" must stay together, while "previous year money" can be split across providers.


    *edit: ah, seems Eco Miser already replied, and more concisely!



    I have been wondering about this. So far each year I have tended to consolidate - if bank X is offering the highest rate, move all of your ISA cash into it.


    If someone wanted to do the opposite - split a cash ISA pot into two new accounts (say the two banks are both offering a great rate, but only on the first £10k) - do you just designate on the transfer form that you only want to transfer a certain amount? (any time I have done this, I have simply transferred everything in the account I was transferring from, so have never noticed)
    (Nearly) dunroving
  • le_loup
    le_loup Posts: 4,047 Forumite
    You can transfer any amount unless it is the current year's deposit, in which case you must transfer all the current year's deposit.


    (Subject to the T&Cs of the provider)
  • Eco_Miser
    Eco_Miser Posts: 4,708
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    dunroving wrote: »
    If someone wanted to do the opposite - split a cash ISA pot into two new accounts (say the two banks are both offering a great rate, but only on the first £10k) - do you just designate on the transfer form that you only want to transfer a certain amount?

    Yes, there are boxes on the form to indicate you don't want to transfer the whole amount, and the amount you do want to transfer, for current year (must be all or none) and previous years.
    Eco Miser
    Saving money for well over half a century
  • Eco_Miser
    Eco_Miser Posts: 4,708
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    bowlhead99 wrote: »
    *edit: ah, seems Eco Miser already replied, and more concisely!

    Ah well, I often find you have already replied, and more comprehensively.
    Eco Miser
    Saving money for well over half a century
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