transfer flexi isa then re fund it?

kev1744

hi all.
i have a virgin money flexi isa earning 4.25%. this was opened in 2022/23 tax year.ive also got a one year fixed cash isa opened in 2023/24 tax year.
am i allowed to transfer the flexi isa to a new 2 year fixed rate isa and then repopulate the flexi with fresh cash?
i was thinking of transferring the flexi to the natwest isa...and then putting some savings into the flexi account but wasnt sure if its allowed or if the transfer would automatically close the flexi account.

refluxer

How did you fund the one year cash ISA you opened during the current tax year ?

If it was funded with new subscriptions, then you won't also be able to pay into the Virgin flexi ISA because you can only pay new subscriptions into one cash ISA at any one time during the current tax year. Presumably when you say you opened the Virgin ISA in 2022/23, you only made payments into it during that tax year and haven't made any during this tax year ?

If it was funded with a transfer containing subscriptions from previous tax years, then you might be able to do what you suggest but you'd need to check that the Virgin flexi ISA allows partial transfers out and the new NatWest ISA allows partial transfers in.

If you do a 'full' transfer from the Virgin flexi ISA then it'll be automatically closed as a result, but that won't matter if you can't continue to fund it anyway.

kev1744

the current tax year isa was new funds.
i think im getting confused as the flexi isa does state that i can withdraw funds and replace the funds within the same tax year 

refluxer

kev1744 said:

the current tax year isa was new funds.
i think im getting confused as the flexi isa does state that i can withdraw funds and replace the funds within the same tax year 

As far as I'm aware, that flexible nature only extends to cash withdrawals - ie. you're allowed to withdraw money in cash and replace it within the same tax year in order to retain it's ISA status. 

Doctor_Who

am i allowed to transfer the flexi isa to a new 2 year fixed rate isa and then repopulate the flexi with fresh cash?

No, for one thing you would be subscribing (adding new money) to two cash ISAs in the same tax year. You can withdraw and redeposit to the flexi ISA within a tax year and this doesn't count towards your allowance, but transferring it isn't the same as a withdrawal.

kev1744

ah i see ( i think) so i can withdraw and replenish the isa but i cant transfer and replenish it.....oh well back to the drawing board then lol

Doctor_Who

kev1744 said:

ah i see ( i think) so i can withdraw and replenish the isa but i cant transfer and replenish it.....oh well back to the drawing board then lol

Yes, withdrawing money to a non-ISA account (or spending it etc etc) and then returning it to the flexi ISA later in the same tax year is fine. However, if you transfer it to another ISA then it's still 'ISA money' and you benefit from the tax advantages. You can't put the value of the 'transfer' back in the flexi ISA (like you can with the value of a withdrawal), otherwise you would be getting extra money in the ISA wrapper as a whole!

Shedman

kev1744 said:

ah i see ( i think) so i can withdraw and replenish the isa but i cant transfer and replenish it.....oh well back to the drawing board then lol

You could open a 2nd Virgin Flexi ISA (as you can have more than one) but obviously in your case you couldn't fund it this year, other than with a transfer in, as you used this years subscription allowance 

Expotter

Sorry to butt in, but would it be possible to pay into 2 different cash ISAs in the same tax year if one of them is completely new subscriptions, but the second one is to pay money back in after having withdrawn it flexibly in the same tax year, from previous year subscriptions?

eskbanker

Expotter said:

Sorry to butt in, but would it be possible to pay into 2 different cash ISAs in the same tax year if one of them is completely new subscriptions, but the second one is to pay money back in after having withdrawn it flexibly in the same tax year, from previous year subscriptions?

Yes, replacing prior year money in a flexible ISA doesn't count as a current year subscription (apart from anything else, it could be more than £20K).