ISA Withdrawals

Futuristic

Is the following statement correct?

Whether or not you have used any of this year’s ISA allowance by withdrawing from your cash ISA and from your S&S ISA depends on when you put the money into the ISA. If the money was invested up to and including 5 April 2015, so were in a previous tax year, then this does not affect this year’s ISA allowance but if they were invested on or after 6th April 2015 then they would be part of your £15,240 ISA allowance for this year.

I was under the impression that if I had £1k in a Cash ISA & £1k in S&S ISA (both were opened in last tax year 14-15) and I withdrew the full £2k total this year (15-16), would this mean I have £13240 remaining allowance?

droopsnoot

That doesn't make a lot of sense to me - surely the issue is not withdrawals, but money being put in to the ISA? If you have £2k in an ISA that you put in last tax year, and withdraw it in this tax year, your allowance is still £15240 because you haven't put any in this year.

ETA - I haven't withdrawn money from an ISA so I can't say I've ever looked at the rules for that, if indeed there are any.

colsten

Futuristic wrote: »

I was under the impression that if I had £1k in a Cash ISA & £1k in S&S ISA (both were opened in last tax year 14-15) and I withdrew the full £2k total this year (15-16), would this mean I have £13240 remaining allowance?

You are under a wrong impression. ISA allowances are annual allowances. What counts is how much you deposited in a given tax year, not how much you withdrew.

There will be some change to this rule from April next year but details have not yet been announced.

jimjames

Futuristic wrote: »

Is the following statement correct?

Yes it is.

Futuristic wrote: »

I was under the impression that if I had £1k in a Cash ISA & £1k in S&S ISA (both were opened in last tax year 14-15) and I withdrew the full £2k total this year (15-16), would this mean I have £13240 remaining allowance?

If you deposited £2k in ISAs last tax year (so before April 2015) then you still have the full allowance of £15240 available this year.

Futuristic

Thank you, I must have mixed myself up.