Flexible ISAs guide

PowerSavingMode

eskbanker said:

PowerSavingMode said:

Withdrawing and depositing across flexible cash ISAs

If I opened a flexible cash ISA earlier this tax year and withdrew, say, the full £20,000 — would I now be able to open another flexible cash ISA and deposit £10K in that and £10K in the older flexible cash ISA? Or does it have to go back into the flexible cash ISA I withdrew from initially? (Hope this makes sense!)

As highlighted prominently in the article this thread is here to discuss:

You must replace the money in the same ISA

The key rule is you must replace the money in the same ISA account you took it out from, otherwise the deposit will count towards your £20,000 annual limit.

Thanks. I thought I'd had a look at that linked page, before, but obviously managed to miss that bit entirely.

So, to be clear, while the limit is shared across ISAs, the flexibility is not — in that I can't "put back" funds into a different flexible ISA, only the one I withdrew from? 

(I'm not even going to ask about withdrawing from previous years' allowances!)

eskbanker

PowerSavingMode said:

So, to be clear, while the limit is shared across ISAs, the flexibility is not — in that I can't "put back" funds into a different flexible ISA, only the one I withdrew from?

You can put the money where you like, but if depositing it into an ISA, the only way to avoid it being treated as new current year money is to replace it into the same ISA from which it was withdrawn.

There was more flexibility prior to this tax year but it was tightened up....

slinger2

One of the most important things about a flexible ISA is that you need to replace the money in the same tax year that you withdrew it (otherwise it'll count as the current year's money). When the money originally went in is not important in most cases. So if you had an ISA with £50k in from various earlier tax years, you could withdraw the £50k and replace it later in the tax year.

masonic

PowerSavingMode said:

(I'm not even going to ask about withdrawing from previous years' allowances!)

There is no difference for previous years' allowances. Both current and prior years work the same since the recent rule change.