Do 2016 Redeposits Have to be To the Same Account as the Withdrawal

Chris75

I understand that from April 6 2016 it will be possible to take money - both this and previous tax years - out of an ISA and then return it in the same tax year without altering either its tax free status nor the ability to put in the full allowance of new money but does it have to be the same account?

I can see obvious advantages in being able to put old money into new accounts - possibly of different types - that do not accept transfers in.

colsten

You can take out up to your entire balance, and you can put some, all or none of it back.

It is extremely unlikely that you can use the flexibility to bypass the 'no transfers in' restrictions. You will almost certainly have to return any money into the account it came out of. You need to check the terms of your ISA as offering flexible ISAs is at the discretion of the ISA provider.

Chris75

colsten wrote: »

You can take out up to your entire balance, and you can put some, all or none of it back.

................. You will almost certainly have to return any money into the account it came out of. You need to check the terms of your ISA as offering flexible ISAs is at the discretion of the ISA provider.

The "almost certainly" is the bit that I am trying to clarify. This is a matter of what the law allows & the existing conditions such as "no transfer in" might just be consigned to history on 6th April as the legal background changes - even assuming that most providers are actually interested in offering ISA products at all for 2016/7.

jamesd

If you pay money into a different account it is treated as new subscription money.

If you use an ISA transfer the maximum allowance that can be transferred is the unused annual allowance, none of the extra for the amount withdrawn above the annual allowance ever gets transferred, though any redeposited annual allowance money will be transferred. After the transfer the ISA rules permit you to redeposit to the original account, but only up to the amount still remaining of the part withdrawn.

You can't use flexibility to circumvent new money only restrictions.

Plan to pay the money back into the original account though if you are considering amounts below the annual subscription limit it doesn't matter in practice.

MDMD

This is quite useful:

https://www.bba.org.uk/wp-content/uploads/2016/02/Flexible-ISA-Customer-web-version.pdf

meanscot

I take it that cash ISA's can be used flexibly if allowed by the ISA provider.


Is there a list of either existing Flexible Cash ISA's or new Flexible Cash ISA's on offer from April 2016 ?


meanscot

beardiedog

Yes, some sort of list would be extremely useful.

Santander state that they won't be offering flexible ISAs:

From 6 April 2016, we won’t be offering additional flexibility on ISAs but some providers will be offering this feature. Those providers may allow you to replace funds that you have withdrawn with them without affecting the ISA limit.

So I'll be transferring my fixed ISA when it matures on 1 May to a provider who does offer flexibility.

Virgin is only offering it on their Easy Access (non-restricted) account, currently at 1.11%.

Still looking...

Barclays 2 year Flexible Cash ISA issue 10 (restricted withdrawals).

MDMD

Skipton offers it on all their non fixed ISAs

http://www.skipton.co.uk/savings/isas/flexible-isas

There is a separate thread about Natiowide

https://forums.moneysavingexpert.com/discussion/5439030

PaulC5

beardiedog wrote: »

Virgin is only offering it on their Easy Access (non-restricted) account, currently at 1.11%.

Where have you read that this account will be flexible?

I cant seem to find it anywhere on there website or within there T&C's for this account, I hope it is though?

I cant see many offering this flexibility or the whole scheme being around for long term becuase the first thing the savvy ones of us are going to do is remove all our money and place it into one of the higher interest current accounts to earn 3% - 5% interest tax free (within your new tax free interest allowance) and put it all back in plus any extra subscribtion towards that years ISA allowance before the 5th April 2017 and repeat the process again the next day!

Shedman

PaulC5 wrote: »

Where have you read that this account will be flexible?

I cant seem to find it anywhere on there website or within there T&C's for this account, I hope it is though?

I cant see many offering this flexibility or the whole scheme being around for long term becuase the first thing the savvy ones of us are going to do is remove all our money and place it into one of the higher interest current accounts to earn 3% - 5% interest tax free (within your new tax free interest allowance) and put it all back in plus any extra subscribtion towards that years ISA allowance before the 5th April 2017 and repeat the process again the next day!

I was also told that by a CS agent that they will be offering flexibility on this ISA - see transcript below

› I am assuming from the information given in your help pages that if I open an Easy Access Cash ISA now and subscribe this years allowance (and possibly transfer in prior years subscriptions from another provider) then this new ISA will automatically become a 'Flexible' ISA from 6 April and that I don't need to wait until after 6 April to open one to ensure that I can take advantage of the Flexibility that the new rules allow?

Received: [15:57] :
Hi you're chatting with Abbie. I've got your question at this end so let's see what I can do to help!

Received: [16:01] :
Exactly, it will automatically become a flexible ISA for you and you are free to take advantage of the flexibility of that from the 6th April!

Received: [16:01] :
You will be able to withdraw then re deposit your previous years subscriptions!

beardiedog

http://uk.virginmoney.com/virgin/isa/flexible-isa/#FlexISA

I can't really see them taking off either especially if not compulsory. Maybe when the banks that don't offer them start losing a lot of business to the competition then perhaps they'll all start to offer them.