Flexible ISA

munromagic

If I have a stocks and shares ISA and have added my full £20,000 ISA allowance by say June of a given financial year. Could I also have a flexible cash ISA that allows me to withdraw contributions made in a given tax year and have £20000 in this also but make sure I withdraw the £20000 before the end of the tax year? I guess it comes down to whether the total balance across all ISA’s is measured during the tax year or at the end of the tax year. If at the end; then by having the £20000 in the cash ISA could avoid (theoretically) income tax on having that £20000 in a regular savings account. 

eskbanker

The short answer is no, you're not allowed to exceed £20K of current year money in ISAs at any point during the year.

The longer version consists of the responses to the same question being asked a few months ago:

https://forums.moneysavingexpert.com/discussion/comment/80426214/#Comment_80426214

munromagic

Understood and thanks for the feedback, I suspected that. However, I guess it would be ok to withdraw the £20k from the flexible cash ISA and deposit it into the Stocks and Shares ISA without having to do an ISA transfer? Assuming of course contributed and withdrawn from within the same tax year?

munromagic

Sorry to confirm the last point, this assumes there have been no contributions to the stocks and shares ISA this tax year, only £20k into the flexible cash ISA. The question being that I could simply withdraw the £20k from the flexible cash ISA and deposit it to the Stocks and Shares ISA without having to do an ISA transfer. 

eskbanker

Yes, current year money can be withdrawn from one flexible ISA and redeposited into another ISA without transferring:

Withdrawals of current year subscriptions, can effectively be replaced in any current year ISA, but cannot breach the ‘one ISA of each type per tax year’ rule.

https://www.gov.uk/guidance/manage-isa-subscriptions-for-your-investors#flexible-isas