Taking money out of years' worth of ISAs?

10_66

OH is trying to decide whether or not to release years’ worth of ISAs to put the money into all of the various 3%, 4% and 5% bank accounts. Have read a lot about not worth having ISAs now, just not sure whether or not it’s the right thing to do. Would be very grateful for some thoughts.

masonic

If you wait until the next tax year and transfer into a flexible ISA, then the money withdrawn can be replaced towards the end of the tax year and taken out again after the tax year rolls over, etc.

10_66

masonic wrote: »

If you wait until the next tax year and transfer into a flexible ISA, then the money withdrawn can be replaced towards the end of the tax year and taken out again after the tax year rolls over, etc.

Thank you masonic. I'm sorry, but not exactly sure what this means. I know that flexible ISAs mean that you can put back in what you withdraw (I think?), so are you saying that as long as the money is transferred into a flexible ISA each year, and then you can withdraw it all for the year, you can then put it back in to reinvest for the next tax year, keeping the tax free status available if you should want it? (Sorry if I've got it muddled).

masonic

Yes, that's exactly what I'm saying. As long as you return the money before the end of the tax year, you won't lose the ISA status of the money.

10_66

masonic wrote: »

Yes, that's exactly what I'm saying. As long as you return the money before the end of the tax year, you won't lose the ISA status of the money.

Thank you so much masonic. So glad I asked this question (and for your reply), as the money was about to be w/d!

10_66

I'm confused again after reading Lloyds ISA information. They say...


"The flexible allowance from the withdrawal of prior year funds cannot be transferred between ISA providers. If you do not replace withdrawals before a transfer, the allowance will be lost".


Does that mean we couldn't do what's mentioned in earlier posts.


Also, would you be able to add a current year's subscription (if their terms and conditions permitted it) and withdraw that too and then replace both current year's and other withdrawals before the end of the tax year?

masonic

10_66 wrote: »

I'm confused again after reading Lloyds ISA information. They say...

"The flexible allowance from the withdrawal of prior year funds cannot be transferred between ISA providers. If you do not replace withdrawals before a transfer, the allowance will be lost".

Does that mean we couldn't do what's mentioned in earlier posts.

The Lloyds information is correct but irrelevant. First you transfer to a flexible ISA (if you are not already in one), then you withdraw the money. Just before the end of each tax year you replace it. If you have to transfer the ISA again in the meantime (which you shouldn't because you don't care about the rate - it is almost always empty), you would have to replace the money first, transfer, then take it out again.

Also, would you be able to add a current year's subscription (if their terms and conditions permitted it) and withdraw that too and then replace both current year's and other withdrawals before the end of the tax year?

Yes you could.

10_66

masonic wrote: »

The Lloyds information is correct but irrelevant. First you transfer to a flexible ISA (if you are not already in one), then you withdraw the money. Just before the end of each tax year you replace it. If you have to transfer the ISA again in the meantime (which you shouldn't because you don't care about the rate - it is almost always empty), you would have to replace the money first, transfer, then take it out again.


Yes you could.

Thank you masonic.