Autumn statement - ISA rule changes from April 2024

eskbanker

westv said:

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Withdrawn money which is then put back into an ISA is not NEW money.

Before April 2024 you can pay new money into multiple ISAs too (there's no limit on opening)!  However, the current rule entails only paying into (no more than) one of each type, which is the restriction that's being lifted....

westv

eskbanker said:

westv said:

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Withdrawn money which is then put back into an ISA is not NEW money.

Before April 2024 you can pay new money into multiple ISAs too (there's no limit on opening)!  However, the current rule entails only paying into (no more than) one of each type, which is the restriction that's being lifted....

That's what I meant.

eskbanker

westv said:

eskbanker said:

westv said:

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Withdrawn money which is then put back into an ISA is not NEW money.

Before April 2024 you can pay new money into multiple ISAs too (there's no limit on opening)!  However, the current rule entails only paying into (no more than) one of each type, which is the restriction that's being lifted....

That's what I meant.

I kinda guessed that, but, as seen in the last few pages (and also many other ISA threads where people mix up opening and funding), precision of terminology is important!

refluxer

westv said:

You can still only pay in a total of £20k of NEW money each year

Yes, that's right.

westv said:

Withdrawn money which is then put back into an ISA is not NEW money.

Yes, but only if the ISA is flexible (not all ISAs are flexible).

Reed_Richards

I think there should be a rule that if you open an ISA you should have 5 working days to fund it or apply for a transfer in and it you do neither then it is automatically closed again.  Such a rule would certainly help to clarify the difference between opening and funding.  

eskbanker

Reed_Richards said:

I think there should be a rule that if you open an ISA you should have 5 working days to fund it or apply for a transfer in and it you do neither then it is automatically closed again.  Such a rule would certainly help to clarify the difference between opening and funding.  

Some ISAs already entail that, but personally I think there are enough existing rules without making up additional new ones!

Reed_Richards

Perhaps so, but people still seem to find some of the existing rules unclear or ambiguous.

eskbanker

Reed_Richards said:

Perhaps so, but people still seem to find some of the existing rules unclear or ambiguous.

Sure, but to me the answer to that is better explanations, not more rules!

surreysaver

eskbanker said:

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....

I obviously came out of that thread being certain I could. I always like to adhere to the rules, which is why I started that thread in the first place.
Obviously the rules and their explanations are not clear, and are set to get worse come April!

surreysaver

westv said:

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.

Flexible ISAs, although created in 2016, due to the low interest rates, I only became aware of earlier this year. They have muddied the rules, as you can take money out of them, put it back, or put it elsewhere in a different type of ISA. 
So, no, I don't think the rules are that simple