MSE News: Budget 2015: ISAs to become fully flexible with withdrawals allowed

colsten

jamesd wrote: »

A HTB ISA is just another cash ISA and it is entirely fine to place new money into another cash ISA in the same tax year provided both cash ISAs are with the same ISA manager.

Yes, you can withdraw past year money from one ISA and pay it back into that ISA in the same tax year even while paying new money into a different ISA. The money withdrawn and redeposited will not count against the current year's allowance.

It's not quite that simple, I'm afraid.

On your first point: this is only possible if the ISA manager offers split ISAs.

On your second point: again, it is only possible if the ISA manager offers flexible ISAs.

In both cases, you need to check the T&Cs that apply to your ISA.

colsten

carlstar wrote: »

My HTB ISA and Cash ISA are not with the same providers which is why I thought there may be an issue with replacing funds in the Cash ISA

There would indeed be an issue, in that this is not allowed under ISA rules. This might be to your advantage, though, as you can get massively better interest in non-ISA accounts that you can hold alongside your HTB ISA without contravening ISA rules.

jamesd

carlstar wrote: »

My HTB ISA and Cash ISA are not with the same providers which is why I thought there may be an issue with replacing funds in the Cash ISA

No issue because it's the old year money that you're working with and that money is "replacement subscriptions" not the "new subscriptions" that are involved with new current year money that counts against the annual limit.

As colsten wrote you do have to ensure that your provider of old year money does offer the flexible ISA feature to withdraw and redeposit money. Not all do. If yours is in one that doesn't offer the feature you can just use an ISA transfer to move the money to one that does.

As colsten wrote also, you do have to ensure that only one ISA manager has new current year cash ISA money at once and MSE has a list of half a dozen or so places that have both HTB and other cash ISAs available in that way. Not relevant to what you're doing but maybe helpful to others.

jamesd

colsten wrote: »

There would indeed be an issue, in that this is not allowed under ISA rules. This might be to your advantage, though, as you can get massively better interest in non-ISA accounts that you can hold alongside your HTB ISA without contravening ISA rules.

That is not correct. The past year money can be wihdrawn and redeposited regardless of where the current year money is under the usual rules that past year money is completely free to go anywhere. All it requires is that the manager with the old year money supports the flexible ISA feature of withdrawing and redepositing past year money.

colsten

jamesd wrote: »

That is not correct........ All it requires is that the manager with the old year money supports the flexible ISA feature of withdrawing and redepositing past year money.

What I said is correct. I was just pointing out that not all ISAs are flexible, even with the same manager, and that anyone who wants to make use of the flexible ISA rules must ensure that their ISA is a flexible ISA. An ISA manager might have some ISAs that are flexible, and others that are not. It is not enough to ask "does the ISA manager support flexible ISAs".

jamesd

Your assertion was that "My HTB ISA and Cash ISA are not with the same providers which is why I thought there may be an issue with replacing funds in the Cash ISA" is not allowed under the ISA rules. That is not true. It is allowed under ISA rules in part because in this case the money to be withdrawn is past year money. All it takes is the ISA account supporting the capability to withdraw and redeposit past year money. Because it is past year money it makes no difference at all where the current year money in the HTB ISA goes.