Rules on flexible ISA's and current years allowance.

Greta123

I already have a flexible ISA, which has only got previous years allowances in it. This current tax year I've withdrawn money from this account and replaced the same amount as per the flexible ISA's rules. Therefore I still haven't deposited any money from this current years 20k allowance.
 
Does anyone know if I can deposit this years 20k allowance with a new provider? The rules surrounding ISA's don't seem to mention this scenario at all.  I don't want to put it into my existing account as its already at the max FSCS protected amount.  

 I can't find any rules stating whether previous years allowances repaid into a flexible ISA have to be with the same provider as the current years allowance. And is it possible to have two flexible ISA's (from different providers) and be able to withdraw previous years allowances from both and be able to replace the funds in both in the same tax year? 

I have called HMRC, and the advisor wasn't sure, saying she "thinks" I can only pay into one account per year.

Thanks. 

eskbanker

Greta123 said:

I already have a flexible ISA, which has only got previous years allowances in it.

If your flexible ISA only holds prior year money then you're free to pay this year's money wherever you like - withdrawing and redepositing prior year money from/to a flexible ISA doesn't affect your choice for current year funds.

Greta123

eskbanker said:

If your flexible ISA only holds prior year money then you're free to pay this year's money wherever you like - withdrawing and redepositing prior year money from/to a flexible ISA doesn't affect your choice for current year funds.

 Thanks, that's what I thought it would be but no real guidance online as far as I could see. You'd think even HMRC staff would know! Cheers 

eskbanker

https://www.gov.uk/guidance/manage-isa-subscriptions-for-your-investors#f-isa is reasonably clear that replacing withdrawn money doesn't count as current year subscriptions:

A flexible ISA is an ISA whose terms and conditions allow the investor to replace, in whole or in part, cash they have withdrawn, without the replacement counting towards their annual subscription limit. 

[...]

Where a withdrawal is made, any subsequent subscriptions in the same tax year that would otherwise count towards the subscription limit will do so only to the to the extent that previously withdrawn amounts have been fully replaced.

[...]

Except for when made to a Lifetime ISA, flexible ISA replacement subscriptions do not count as subscriptions for the purpose of determining whether the investor has subscribed to more than one ISA of the same type

Greta123

Thank you so much. 

It would be a lot more helpful if HMRC also put that in the guidance for the general public rather than just the guidance for ISA managers. As I'm not an Isa manager would never have gone looking at that guidance myself. 

And the staff member on the HMRC helpline obviously doesn't have guidance that covers this. ( But having worked for HMRC myself, it's more like she's under too much stress and time targets to hit to spend an hour or two looking for it like I've done)   

masonic

The expectation is that the ISA managers should be referring to that guidance and using it to inform customers. In reality (and as you have found), front line staff at HMRC and most ISA providers are fairly clueless about the intricacies of ISAs.

Greta123

You're right there. Thank gawd for MSE forums

RG2015

Have a look at the Money Saving Expert article on the link below.

https://www.moneysavingexpert.com/savings/flexible-isas/#:~:text=Past Emails Unsubscribe-,What is a flexible ISA?,allowance, which is £20,000.