Flexible Cash ISA Rules

RG2015

I have a Virgin Money Flexible Exclusive Cash ISA which I subscribed to in 2021:2022

I continued to add and withdraw from this account in 2022:2023 but always keeping below the balance held at midnight on 5th April 2022.

In January 2023 I subscribed to the VM Exclusive Fixed ISA which is on the same platform as the Flexible ISA.

Now, over a month later Virgin Money are saying that I have added new money to more than one ISA this tax year.

Is the money I have added to the old Flexible ISA this year regarded as a new subscription out of my current year’s allowance, thus making me ineligible for subscribing to another cash ISA this tax year?

eskbanker

My understanding is that the rules allow you to do what you've done, in that VM should report the net current year subscriptions to the old ISA as zero (or less), but not sure what can be done if they disagree!

Is it perhaps possible that net current year subscriptions to the flexible ISA are positive?  The test isn't whether the balance is below the start of the year but whether you've withdrawn all that's been added, i.e. if some of what you've withdrawn is effectively interest on prior year money this could leave the net current year subscription as positive....

RG2015

Thanks.

The balance in the current tax year has never exceeded the balance at midnight on 5th April 2022. This did not include the annual interest added in December which I withdrew to keep the numbers in round thousands.

During the current tax year, I have withdrawn and added amounts within the opening balance amount. Therefore the net additions to the flexible ISA are zero or negative.

RG2015

I think the question is whether the flexibility can be carried forward to a new tax year without affecting that year's ISA allowance.

As a test, what is the position for the following example?

I have a balance of £1,000 in a flexible easy access ISA at midnight on 5th April 2022 and the same balance of £1,000 at midnight on 6th April 2022..

Does this mean that I can add and remove up to £1,000 in the year ending 5th April 2023 and also subscribe to a new ISA in the year ending 5th April 2023?

someone

RG2015 said:

Does this mean that I can add and remove up to £1,000 in the year ending 5th April 2023 and also subscribe to a new ISA in the year ending 5th April 2023?

This is permitted if the ISA having additions/withdrawals is flexible.

I would ask Virgin to tell you which transaction they think resulted in a new subscription been made during the 2022/2023 tax year.

The way you have described the situation the only thing that leaps to mind is something about the order in which they have applied the transactions e.g. you paid in more than once on the same "day" and also made a withdrawal they may have added up the deposits first and then deducted the payments. On a current account this would be to your benefit as it could prevent an overdrawn situation. Also keep in mind a "day" might be more than one day due to bank holidays etc.

RG2015

someone said:

RG2015 said:

Does this mean that I can add and remove up to £1,000 in the year ending 5th April 2023 and also subscribe to a new ISA in the year ending 5th April 2023?

This is permitted if the ISA having additions/withdrawals is flexible.

I would ask Virgin to tell you which transaction they think resulted in a new subscription been made during the 2022/2023 tax year.

The way you have described the situation the only thing that leaps to mind is something about the order in which they have applied the transactions e.g. you paid in more than once on the same "day" and also made a withdrawal they may have added up the deposits first and then deducted the payments. On a current account this would be to your benefit as it could prevent an overdrawn situation. Also keep in mind a "day" might be more than one day due to bank holidays etc.

Thanks.

I did this yesterday, and if the withdrawals are excluded, the balance did exceed the amount brought forward from the previous year. But the balance at the end of the day would have been less than the balance at the end of the previous day.

The VM customer services person was adamant that I could not add any money to more than one cash isa in a single tax year.

He referred the case to the ISA department so I will wait and see what they say.

masonic

RG2015 said:
The VM customer services person was adamant that I could not add any money to more than one cash isa in a single tax year.

This is true, but irrelevant, because you are not trying to add money, you are trying to replace money.

RG2015

masonic said:

RG2015 said:
The VM customer services person was adamant that I could not add any money to more than one cash isa in a single tax year.

This is true, but irrelevant, because you are not trying to add money, you are trying to replace money.

Sadly the combined VM ISA team took about an hour to not come to any conclusion.

They say they will get back to me but I fear it will be as @someone said above and my ISA status will not be resolved before 5th April.

masonic

RG2015 said:

masonic said:

RG2015 said:
The VM customer services person was adamant that I could not add any money to more than one cash isa in a single tax year.

This is true, but irrelevant, because you are not trying to add money, you are trying to replace money.

Sadly the combined VM ISA team took about an hour to not come to any conclusion.

They say they will get back to me but I fear it will be as @someone said above and my ISA status will not be resolved before 5th April.

That itself warrants a formal complaint (it cannot be considered acceptable that ISA-trained staff fail to understand how their own product works, given an hour to study the details), and if you are correct about them not reaching a conclusion within a month, then you might find yourself glad of having started the complaint clock sooner rather than later.

35har1old

RG2015 said:

masonic said:

RG2015 said:
The VM customer services person was adamant that I could not add any money to more than one cash isa in a single tax year.

This is true, but irrelevant, because you are not trying to add money, you are trying to replace money.

Sadly the combined VM ISA team took about an hour to not come to any conclusion.

They say they will get back to me but I fear it will be as @someone said above and my ISA status will not be resolved before 5th April.

Have you printed out the statement to check the balances

35har1old

RG2015 said:

someone said:

RG2015 said:

Does this mean that I can add and remove up to £1,000 in the year ending 5th April 2023 and also subscribe to a new ISA in the year ending 5th April 2023?

This is permitted if the ISA having additions/withdrawals is flexible.

I would ask Virgin to tell you which transaction they think resulted in a new subscription been made during the 2022/2023 tax year.

The way you have described the situation the only thing that leaps to mind is something about the order in which they have applied the transactions e.g. you paid in more than once on the same "day" and also made a withdrawal they may have added up the deposits first and then deducted the payments. On a current account this would be to your benefit as it could prevent an overdrawn situation. Also keep in mind a "day" might be more than one day due to bank holidays etc.

Thanks.

I did this yesterday, and if the withdrawals are excluded, the balance did exceed the amount brought forward from the previous year. But the balance at the end of the day would have been less than the balance at the end of the previous day.

The VM customer services person was adamant that I could not add any money to more than one cash isa in a single tax year.

He referred the case to the ISA department so I will wait and see what they say.

That might be enough to trigger this situation