Interest on mini ISA: can you take it out without affecting the £3000 limit.

emu

I hope this isn't a stupid question. If I have £6,000 in a mini ISA and have earned £300 interest in a particular year, is it possible to take out up to the £300 (which is interest) and still put in £3000 that year.

I know that if you take out money it is not possible to replace it within that tax year. So if (as I did on-line last year) you mistakenly transfer out money instead of putting it into the ISA account, you can only put in £3000 minus the mistake amount that year. I don't understand how the interest comes into this all this as it grows, and how it affects what goes in or out. Could I argue, for example, that the £40 that I removed accidentally came from my £300 interest or is it assumed that it comes from the actual savings?

Biggles

The limit is only a limit on the amount you can put in each year. The amount you take out doesn't affect it, whether it's interest or a withdrawal of capital. You can take the whole £3,000 if you like (though it wouldn't be advisable).

But if you do take any money out, you can't put it back if you've already subscribed your £3,000 in that tax year. Obviously, the ideal is to leave all the interest in as well and let it accumulate, there's not limit to the amount you can hold in an ISA, just to the amount you can put in each year.