Autumn statement - ISA rule changes from April 2024

masonic

jimjames said:

refluxer said:

surreysaver said:

refluxer said:

surreysaver said:

I wonder how this would work with flexible ISAs. I've currently got £20k sitting in a flexible cash ISA that I've put in this year, as well as subscribing to a S&S ISA. As long as I take out of my cash ISA an equivalent amount that I've paid into my S&S ISA before the end of the tax year, this is acceptable.
What will stop people paying into multiple flexible ISAs during the course of the year, but then withdrawing from them before 5th April?

I'm wondering if I've misunderstood ? Anyone who pays more than £20k of new subscriptions in total into any combination of ISAs of any type in the same tax year will have broken the £20k ISA limit rule and therefore made a false statement on any cash ISA declarations, regardless of the state of play at the end of the tax year or whether that's now or during the next tax year (after the rule changes).

"I declare that I have not subscribed/made a payment to and will not subscribe/make a payment more than the overall subscription limit in total to any combination of permitted ISA types in the same tax year"

You have misunderstood. Here's the thread started by myself earlier this year
https://forums.moneysavingexpert.com/discussion/6438967/flexible-cash-isa-plus-stocks-shares-isa

 if at any point during the tax year you've paid more than £20k of new subscriptions into ISAs of any type (flexible or otherwise

The point is that with flexible ISAs that's no longer quite true. If you pay in £20k, draw out £15k, pay back £10k then you've paid in a total of £30k new subscriptions into ISAs during that year which is entirely within the rules.

No, this is incorrect. If you pay in £20k, draw out £15k, pay back £10k, then you've made £20k of new subscriptions and £10k of replacement subscriptions. Replacement subscriptions are not counted as new subscriptions. However, if you don't draw out the £15k, the £10k will count towards the subscriptions and be an invalid subscription. If you subsequently withdraw £15k to make things appear above board before the end of the tax year, then what you actually have is £5k of valid subscriptions and £10k of invalid subscriptions that might need to be removed and the income and/or capital gains subject to tax. Supposing this was identified some years later, through an improved data sharing regime, you might be in a bit of a pickle!

surreysaver

eskbanker said:

jimjames said:

refluxer said:

surreysaver said:

refluxer said:

surreysaver said:

I wonder how this would work with flexible ISAs. I've currently got £20k sitting in a flexible cash ISA that I've put in this year, as well as subscribing to a S&S ISA. As long as I take out of my cash ISA an equivalent amount that I've paid into my S&S ISA before the end of the tax year, this is acceptable.
What will stop people paying into multiple flexible ISAs during the course of the year, but then withdrawing from them before 5th April?

I'm wondering if I've misunderstood ? Anyone who pays more than £20k of new subscriptions in total into any combination of ISAs of any type in the same tax year will have broken the £20k ISA limit rule and therefore made a false statement on any cash ISA declarations, regardless of the state of play at the end of the tax year or whether that's now or during the next tax year (after the rule changes).

"I declare that I have not subscribed/made a payment to and will not subscribe/make a payment more than the overall subscription limit in total to any combination of permitted ISA types in the same tax year"

You have misunderstood. Here's the thread started by myself earlier this year
https://forums.moneysavingexpert.com/discussion/6438967/flexible-cash-isa-plus-stocks-shares-isa

 if at any point during the tax year you've paid more than £20k of new subscriptions into ISAs of any type (flexible or otherwise

The point is that with flexible ISAs that's no longer quite true. If you pay in £20k, draw out £15k, pay back £10k then you've paid in a total of £30k new subscriptions into ISAs during that year which is entirely within the rules.

But flexible ISAs have to entail the principle of net contributions, so in that scenario the £15K withdrawal is deducted from the original contribution, leaving a net contribution of £5K (and hence a remaining allowance of £15K will be shown by the provider at this point), and the £10K is then effectively bringing the net total to £15K.

That sequence of events is fine, but if the £20K and the £15K are paid in before any flexible withdrawals, then the net contribution exceeds £20K for a time, which is where the non-compliance arises.

Edit: this issue of sequencing came up in the other thread linked above, in which @surreysaver initially seemed to start from the same position as above (exceeding £20K is OK as long as it's no more than £20K by year end) but then backtracked to accepting that "At no time was I going to have more than £20k subscribed at any one time":

https://forums.moneysavingexpert.com/discussion/comment/79985243/#Comment_79985243

I didn't back track. That was my position at the beginning of the thread before I had fully read up on it

surreysaver

jimjames said:

refluxer said:

surreysaver said:

refluxer said:

surreysaver said:

I wonder how this would work with flexible ISAs. I've currently got £20k sitting in a flexible cash ISA that I've put in this year, as well as subscribing to a S&S ISA. As long as I take out of my cash ISA an equivalent amount that I've paid into my S&S ISA before the end of the tax year, this is acceptable.
What will stop people paying into multiple flexible ISAs during the course of the year, but then withdrawing from them before 5th April?

I'm wondering if I've misunderstood ? Anyone who pays more than £20k of new subscriptions in total into any combination of ISAs of any type in the same tax year will have broken the £20k ISA limit rule and therefore made a false statement on any cash ISA declarations, regardless of the state of play at the end of the tax year or whether that's now or during the next tax year (after the rule changes).

"I declare that I have not subscribed/made a payment to and will not subscribe/make a payment more than the overall subscription limit in total to any combination of permitted ISA types in the same tax year"

You have misunderstood. Here's the thread started by myself earlier this year
https://forums.moneysavingexpert.com/discussion/6438967/flexible-cash-isa-plus-stocks-shares-isa

 if at any point during the tax year you've paid more than £20k of new subscriptions into ISAs of any type (flexible or otherwise

The point is that with flexible ISAs that's no longer quite true. If you pay in £20k, draw out £15k, pay back £10k then you've paid in a total of £30k new subscriptions into ISAs during that year which is entirely within the rules.

No longer true? Have you got a link for that?

refluxer

surreysaver said:

jimjames said:
The point is that with flexible ISAs that's no longer quite true. If you pay in £20k, draw out £15k, pay back £10k then you've paid in a total of £30k new subscriptions into ISAs during that year which is entirely within the rules.

No longer true? Have you got a link for that?

The replies from Eskbanker and masonic following that post provided clarification that when you replace funds that have been withdrawn from a flexible ISA within the same tax year, they don't technically count again as new subscriptions. So in the example given, only £20k of new subscriptions have been paid in, in total.

eskbanker

surreysaver said:

eskbanker said:

jimjames said:

refluxer said:

surreysaver said:

refluxer said:

surreysaver said:

I wonder how this would work with flexible ISAs. I've currently got £20k sitting in a flexible cash ISA that I've put in this year, as well as subscribing to a S&S ISA. As long as I take out of my cash ISA an equivalent amount that I've paid into my S&S ISA before the end of the tax year, this is acceptable.
What will stop people paying into multiple flexible ISAs during the course of the year, but then withdrawing from them before 5th April?

I'm wondering if I've misunderstood ? Anyone who pays more than £20k of new subscriptions in total into any combination of ISAs of any type in the same tax year will have broken the £20k ISA limit rule and therefore made a false statement on any cash ISA declarations, regardless of the state of play at the end of the tax year or whether that's now or during the next tax year (after the rule changes).

"I declare that I have not subscribed/made a payment to and will not subscribe/make a payment more than the overall subscription limit in total to any combination of permitted ISA types in the same tax year"

You have misunderstood. Here's the thread started by myself earlier this year
https://forums.moneysavingexpert.com/discussion/6438967/flexible-cash-isa-plus-stocks-shares-isa

 if at any point during the tax year you've paid more than £20k of new subscriptions into ISAs of any type (flexible or otherwise

The point is that with flexible ISAs that's no longer quite true. If you pay in £20k, draw out £15k, pay back £10k then you've paid in a total of £30k new subscriptions into ISAs during that year which is entirely within the rules.

But flexible ISAs have to entail the principle of net contributions, so in that scenario the £15K withdrawal is deducted from the original contribution, leaving a net contribution of £5K (and hence a remaining allowance of £15K will be shown by the provider at this point), and the £10K is then effectively bringing the net total to £15K.

That sequence of events is fine, but if the £20K and the £15K are paid in before any flexible withdrawals, then the net contribution exceeds £20K for a time, which is where the non-compliance arises.

Edit: this issue of sequencing came up in the other thread linked above, in which @surreysaver initially seemed to start from the same position as above (exceeding £20K is OK as long as it's no more than £20K by year end) but then backtracked to accepting that "At no time was I going to have more than £20k subscribed at any one time":

https://forums.moneysavingexpert.com/discussion/comment/79985243/#Comment_79985243

I didn't back track. That was my position at the beginning of the thread before I had fully read up on it

But having read up on it (during that April thread) and accepted that you can't have more than £20K of current year money in ISAs at any time after all, you've now reverted to your original proposition in this thread ("I've currently got £20k sitting in a flexible cash ISA that I've put in this year, as well as subscribing to a S&S ISA")?

surreysaver

eskbanker said:

surreysaver said:

eskbanker said:

jimjames said:

refluxer said:

surreysaver said:

refluxer said:

surreysaver said:

I wonder how this would work with flexible ISAs. I've currently got £20k sitting in a flexible cash ISA that I've put in this year, as well as subscribing to a S&S ISA. As long as I take out of my cash ISA an equivalent amount that I've paid into my S&S ISA before the end of the tax year, this is acceptable.
What will stop people paying into multiple flexible ISAs during the course of the year, but then withdrawing from them before 5th April?

I'm wondering if I've misunderstood ? Anyone who pays more than £20k of new subscriptions in total into any combination of ISAs of any type in the same tax year will have broken the £20k ISA limit rule and therefore made a false statement on any cash ISA declarations, regardless of the state of play at the end of the tax year or whether that's now or during the next tax year (after the rule changes).

"I declare that I have not subscribed/made a payment to and will not subscribe/make a payment more than the overall subscription limit in total to any combination of permitted ISA types in the same tax year"

You have misunderstood. Here's the thread started by myself earlier this year
https://forums.moneysavingexpert.com/discussion/6438967/flexible-cash-isa-plus-stocks-shares-isa

 if at any point during the tax year you've paid more than £20k of new subscriptions into ISAs of any type (flexible or otherwise

The point is that with flexible ISAs that's no longer quite true. If you pay in £20k, draw out £15k, pay back £10k then you've paid in a total of £30k new subscriptions into ISAs during that year which is entirely within the rules.

But flexible ISAs have to entail the principle of net contributions, so in that scenario the £15K withdrawal is deducted from the original contribution, leaving a net contribution of £5K (and hence a remaining allowance of £15K will be shown by the provider at this point), and the £10K is then effectively bringing the net total to £15K.

That sequence of events is fine, but if the £20K and the £15K are paid in before any flexible withdrawals, then the net contribution exceeds £20K for a time, which is where the non-compliance arises.

Edit: this issue of sequencing came up in the other thread linked above, in which @surreysaver initially seemed to start from the same position as above (exceeding £20K is OK as long as it's no more than £20K by year end) but then backtracked to accepting that "At no time was I going to have more than £20k subscribed at any one time":

https://forums.moneysavingexpert.com/discussion/comment/79985243/#Comment_79985243

I didn't back track. That was my position at the beginning of the thread before I had fully read up on it

But having read up on it (during that April thread) and accepted that you can't have more than £20K of current year money in ISAs at any time after all, you've now reverted to your original proposition in this thread ("I've currently got £20k sitting in a flexible cash ISA that I've put in this year, as well as subscribing to a S&S ISA")?

I think you've misunderstood what I wrote in my original thread. It was my intention when I wrote that to not have more than £20k at any one time. But I came out of that thread with the conclusion that I could 
Like I say, the rules are not clear, and it will only get worse with this new proposal 

Reed_Richards

I would say that the intention of the rules is abundantly clear; discussions like this hinge around whether there is a loophole in what has actually been set down in writing.

surreysaver

Reed_Richards said:

I would say that the intention of the rules is abundantly clear; discussions like this hinge around whether there is a loophole in what has actually been set down in writing.

That's the trouble. The intention and what they actually say are different. They have to be explicitly accurate. Its not a loophole if that's not what they say

eskbanker

surreysaver said:

eskbanker said:

surreysaver said:

eskbanker said:

jimjames said:

refluxer said:

surreysaver said:

refluxer said:

surreysaver said:

I wonder how this would work with flexible ISAs. I've currently got £20k sitting in a flexible cash ISA that I've put in this year, as well as subscribing to a S&S ISA. As long as I take out of my cash ISA an equivalent amount that I've paid into my S&S ISA before the end of the tax year, this is acceptable.
What will stop people paying into multiple flexible ISAs during the course of the year, but then withdrawing from them before 5th April?

I'm wondering if I've misunderstood ? Anyone who pays more than £20k of new subscriptions in total into any combination of ISAs of any type in the same tax year will have broken the £20k ISA limit rule and therefore made a false statement on any cash ISA declarations, regardless of the state of play at the end of the tax year or whether that's now or during the next tax year (after the rule changes).

"I declare that I have not subscribed/made a payment to and will not subscribe/make a payment more than the overall subscription limit in total to any combination of permitted ISA types in the same tax year"

You have misunderstood. Here's the thread started by myself earlier this year
https://forums.moneysavingexpert.com/discussion/6438967/flexible-cash-isa-plus-stocks-shares-isa

 if at any point during the tax year you've paid more than £20k of new subscriptions into ISAs of any type (flexible or otherwise

The point is that with flexible ISAs that's no longer quite true. If you pay in £20k, draw out £15k, pay back £10k then you've paid in a total of £30k new subscriptions into ISAs during that year which is entirely within the rules.

But flexible ISAs have to entail the principle of net contributions, so in that scenario the £15K withdrawal is deducted from the original contribution, leaving a net contribution of £5K (and hence a remaining allowance of £15K will be shown by the provider at this point), and the £10K is then effectively bringing the net total to £15K.

That sequence of events is fine, but if the £20K and the £15K are paid in before any flexible withdrawals, then the net contribution exceeds £20K for a time, which is where the non-compliance arises.

Edit: this issue of sequencing came up in the other thread linked above, in which @surreysaver initially seemed to start from the same position as above (exceeding £20K is OK as long as it's no more than £20K by year end) but then backtracked to accepting that "At no time was I going to have more than £20k subscribed at any one time":

https://forums.moneysavingexpert.com/discussion/comment/79985243/#Comment_79985243

I didn't back track. That was my position at the beginning of the thread before I had fully read up on it

But having read up on it (during that April thread) and accepted that you can't have more than £20K of current year money in ISAs at any time after all, you've now reverted to your original proposition in this thread ("I've currently got £20k sitting in a flexible cash ISA that I've put in this year, as well as subscribing to a S&S ISA")?

I think you've misunderstood what I wrote in my original thread. It was my intention when I wrote that to not have more than £20k at any one time. But I came out of that thread with the conclusion that I could

I can't see anything in that thread that would support that interpretation?

In both that thread and this one, it's been made clear that you're not allowed to have more than £20K of current year money in ISAs at any time, complete with supporting references to show the workings behind that....

westv

I thought the new rules were quite simple to understand. Have I misunderstood?

From April 24 you can have multiple ISA accounts opened in the same year.
You can still only pay in a total of £20k of NEW money each year
Withdrawn money which is then put back into an ISA is not NEW money.