Limit Breach

mrmustard61

I have breached the limits. I thought that Cash and S&S limits were independent. I current have a small monthly investment in S&S (£150pm). In November I started a cash ISA with another provider and opened it with £20k (and subsequently transferred more from another Cash ISA). I now realise that I've breached the 20k total. What should I do?

eskbanker

Is the cash ISA a flexible one?

mrmustard61

fixed rate.180 loss of interest for withdrawal. 

mrmustard61

So should I withdraw 1800 from the Cash Isa to fix this?

eskbanker

In that case, it'll make most sense to just leave it alone - HMRC will be informed of your contributions by the two ISA managers concerned after the end of the tax year, and may choose to take action, but will often allow a one-off first-time transgression.  Worst case would be declaring the £1800 excess as if it was in a taxable account, but the financial impact of interest on that would be negligible and certainly much better than the penalty for breaking your fixed term....

Edit: should have asked, is the S&S ISA flexible?

PloughmansLunch

I'm in a similar boat to the OP albeit a couple of steps behind - I have a S&S ISA with Vanguard, but would like to max out a flexible cash ISA this financial year - if I sell off the funds in the S&S ISA first is this allowed, or will the S&S payments in be counted towards the subscription limits for the year?

mrmustard61

If you mean can i make withdrawals - i think the answer is yes.

eskbanker

mrmustard61 said:

If you mean can i make withdrawals - i think the answer is yes.

No, I mean is it actually designated as a flexible ISA - it's possible to make withdrawals from any S&S ISA but it's only flexible ones that allow such withdrawals to be reinstated back into the same, or (importantly) another, ISA in the same tax year....

eskbanker

PloughmansLunch said:

I'm in a similar boat to the OP albeit a couple of steps behind - I have a S&S ISA with Vanguard, but would like to max out a flexible cash ISA this financial year - if I sell off the funds in the S&S ISA first is this allowed, or will the S&S payments in be counted towards the subscription limits for the year?

Best keep that enquiry to another thread rather than jumping in on this one, as it can get confusing if two separate scenarios (however superficially similar) end up being discussed in parallel....

mrmustard61

I don't know. It's a Halifax ISA Investor,

eskbanker

mrmustard61 said:

I don't know. It's a Halifax ISA Investor,

https://www.halifax.co.uk/investing/start-investing/share-dealing-services/stocks-and-shares-isa.html

Halifax Stocks and Shares ISAs are not flexible ISAs, so money you withdraw then pay back in during the same tax year will count towards your £20,000 ISA allowance

so that rules out the possible benefit of withdrawing your 2022/23 S&S ISA contributions from that, although ceasing them for the rest of the tax year would slightly reduce the breach.