Withdrawing ISA

ocazza

Hi there!

My 1 year fixed rate ISA matures this month and I was what happens if I withdraw that money?

Do I still have my £20,000 allowance this year as the money was put into the ISA last year or does withdrawing it mean I lose this years as well?

Reed_Richards

If you withdraw it you still have this year's £20,000 ISA allowance.

If you transfer it to a new ISA using the ISA transfer process then you have that money in another ISA and you still have your £20,000 allowance as well.

ColdIron

Don't withdraw it, you will lose the ISA status. Transfer it to another one with a good rate and then use this year's allowance as well so £40,000 protected from tax

ocazza

ColdIron said:

Don't withdraw it, you will lose the ISA status. Transfer it to another one with a good rate and then use this year's allowance as well so £40,000 protected from tax

What if I withdraw it and give the money to someone else who has their full allowance left this tax year to put in their ISA and then I just don’t put any money into my own ISA the rest of this tax year?

jimjames

ocazza said:

ColdIron said:

Don't withdraw it, you will lose the ISA status. Transfer it to another one with a good rate and then use this year's allowance as well so £40,000 protected from tax

What if I withdraw it and give the money to someone else who has their full allowance left this tax year to put in their ISA and then I just don’t put any money into my own ISA the rest of this tax year?

Why would you want to do that when it's already in an ISA wrapper? You can give your money to whoever you want and they can do whatever they want with it. Each adult in the UK has a £20k ISA allowance so whoever you give it to can use that if they want.

Even if you give the money away you still have the allowance for this year yourself.

eskbanker

ocazza said:

ColdIron said:

Don't withdraw it, you will lose the ISA status. Transfer it to another one with a good rate and then use this year's allowance as well so £40,000 protected from tax

What if I withdraw it and give the money to someone else who has their full allowance left this tax year to put in their ISA and then I just don’t put any money into my own ISA the rest of this tax year?

Perhaps it'll help if you clarify what you're trying to achieve here, as it's far from obvious?

ocazza

eskbanker said:

ocazza said:

ColdIron said:

Don't withdraw it, you will lose the ISA status. Transfer it to another one with a good rate and then use this year's allowance as well so £40,000 protected from tax

What if I withdraw it and give the money to someone else who has their full allowance left this tax year to put in their ISA and then I just don’t put any money into my own ISA the rest of this tax year?

Perhaps it'll help if you clarify what you're trying to achieve here, as it's far from obvious?

Apologies!

My mum retired and wanted to put her money to use, so I suggested an ISA and said I’d set it up for her. I set it up in my name and with all my details so it is using my allowance.

I wanted to withdraw it when it matures and put it in an ISA that is using my mum’s details and her allowance.

If I do that does that then mean that my allowance has been used for this year and what does it mean for tax purposes?

billbadger

ocazza said:

eskbanker said:

ocazza said:

ColdIron said:

Don't withdraw it, you will lose the ISA status. Transfer it to another one with a good rate and then use this year's allowance as well so £40,000 protected from tax

What if I withdraw it and give the money to someone else who has their full allowance left this tax year to put in their ISA and then I just don’t put any money into my own ISA the rest of this tax year?

Perhaps it'll help if you clarify what you're trying to achieve here, as it's far from obvious?

Apologies!

My mum retired and wanted to put her money to use, so I suggested an ISA and said I’d set it up for her. I set it up in my name and with all my details so it is using my allowance.

I wanted to withdraw it when it matures and put it in an ISA that is using my mum’s details and her allowance.

If I do that does that then mean that my allowance has been used for this year and what does it mean for tax purposes?

My suggestion would be that you give your mum the money you would receive from withdrawing the ISA your own (NON-ISA) funds, assuming you have these and she invests those it an ISA in her name. You then retain last year's ISA for yourself, she has a new one and you still have your 24/25 allowance untouched. 

eskbanker

Why didn't you just help her open an ISA in her name in the first place?

Anyway, given where things now are, you (both) still have a £20K allowance to use in 2024/25 - unfortunately, having opened in your name, it's not possible to transfer the money directly into an ISA in her name, so she'll need to use her £20K allowance for (most of) the proceeds of the maturing product, but you still have your own allowance.

No tax implications spring to mind here.... 

ocazza

eskbanker said:

Why didn't you just help her open an ISA in her name in the first place?

Anyway, given where things now are, you (both) still have a £20K allowance to use in 2024/25 - unfortunately, having opened in your name, it's not possible to transfer the money directly into an ISA in her name, so she'll need to use her £20K allowance for (most of) the proceeds of the maturing product, but you still have your own allowance.

No tax implications spring to mind here.... 

Because I’m stupid and just didn’t think! But thank you for your help, appreciate it.

badger09

ocazza said:

eskbanker said:

Why didn't you just help her open an ISA in her name in the first place?

Anyway, given where things now are, you (both) still have a £20K allowance to use in 2024/25 - unfortunately, having opened in your name, it's not possible to transfer the money directly into an ISA in her name, so she'll need to use her £20K allowance for (most of) the proceeds of the maturing product, but you still have your own allowance.

No tax implications spring to mind here.... 

Because I’m stupid and just didn’t think! But thank you for your help, appreciate it.

Refreshingly honest.