With a Flexible ISA --- can you do the following ?

The_Only_Homer_Simpson_UK

 Ive been told by an ISA provider  and  if I've read the flexible ISA rules correctly .that one can do the following ....

I have  a : Cash Isa already open with  provider (A)  with 10k in it already from prev years  -- i then add £20k in as this tax year allowance --
I later find Slightly better rate ( albeit  marginal) elsewhere --Provider (B)

 so i  then Withdraw said £20k  that was paid into provider  (A) to  my current bank account (  ie not an isa transfer)

i then open up new isa  with provider (B) and immediately pay the £20k from Current account  into new isa provider

Can i then  go back to original Isa provider (A) and deposit a further £20k in ?-----as thats a flexible Isa allowing you to repay what's withdrawn ?

therefore in effect 2 x £20k deposits in one tax year ? total £40k into cash isa in one tax year 

is this allowed ? 

thanks for any advice / clarity 

Expotter

In short, No. All of the current year cash subscriptions have to be within the same ISA, up to a maximum of £20k per tax year.

jimjames

When  you open the second ISA you sign a declaration that you've not subscribed to another ISA this tax year. I assume you didn't answer that question correctly when you opened the second one and paid money in.

masonic

No you have not found a loophole that would allow you to pay £40k into cash ISAs in one tax year. The first breach would occur when you paid any money into ISA B (although this would be disregarded due to the cash ISA self-transfer rule). The second breach would occur when you started paying money into ISA A after fully using your allowance in ISA B. You would be in breach of both the overall £20k allowance and paying into more than one cash ISA in a single tax year.

The_Only_Homer_Simpson_UK

thanks all  seemed a bit odd when i asked the  Building society  i was talking to if this was possible and they said yes.....