Two isas flexible and non flexible rules

Tonys101

Hi

I have a stocks and shares  flexible isa with eqi and i had £20,000 worth of shares which i sold and then i  transferred the money i had there  back to my bank (they where added via bed and isa), i have two question which are below 


1-Can i add more/transfer (another bed and isa) shares  which are sitting in my regular share dealing account to  my eqi stocks and shares flexible isa.  I all ready moved/transferred  shares from my share dealing account to my isa once this tax year (any tax liable) 
 
2-Can i open a second isa with a diffrent company being that the second stocks and share  isa is not a flexible isa and use that to purchase a fund? what are the rules

I no i can have multiples  isa's  but i put the max in my flexbaile isa whicj regarding the first line 

masonic

1) Assuming the withdrawal you mention at the start of your post took place during this tax year, then yes you can replace the money you have withdrawn. You can only move cash between a standard investment account and an ISA, what then takes place within the ISA is irrelevant.

2) Assuming you have not already used your 2024/25 ISA allowance at Eqi, then yes, you can open one or more ISAs elsewhere to use your current year ISA allowance.

Tonys101

I have a flexible stocks ans shares   ISA , so the allowance can never be used if I remove money I can re add it 

FlexIble 

Hence I'm asking if I have put 20,000 in being a bed and isa of shares then sold the shares removed the money 

Can I 
- add more shares via a bed and isa 
-can I open a non flexible ISA in the same tax year and use up the £20,000 allowance in the none flexible ISA 

Tonys101

Do you pay tax on a bed and isa ? 

friolento

You can only ever add a total of £20k each tax year. You can spread the £20k over any number of ISAs but the only way to move some or all of the £20k from one ISA to another is through a formal ISA transfer. 

Whether your ISA is flexible or not doesn’t come into it

Bed & ISA does not give you a higher than £20k annual limit

Not sure whether this answers your questions, and I am not sure what you want to do & why. Can you explain further, and can you be precise on how much you deposited into which ISA(s) this year?

eskbanker

Tonys101 said:

Do you pay tax on a bed and isa ? 

Bed & ISA is just a convenient label for selling investments outside an ISA, depositing the proceeds into an ISA and then repurchasing investments within the ISA wrapper, but those three processes are each individually the same as if they were done separately, so the initial sale needs to be assessed for capital gains tax in the normal way.

Likewise, the proceeds moved into the ISA as a result of your bed & ISA are counted towards your annual ISA allowance.  If you've subsequently withdrawn those proceeds from a flexible ISA then yes, you can redeposit the same amount back into the same ISA, whether directly or via bed & ISA, but you wouldn't have the option of paying new money into a different ISA if your 2024/25 allowance has already been fully used with the flexible one (even if subsequently withdrawn).

I'm also unclear on what you're trying to achieve though - the benefit of bed & ISA is generally to get unwrapped investments into the ISA tax shelter (specifically to avoid future taxation on growth or dividends), so swiftly reselling the investments once in the ISA doesn't have any obvious benefit?

Tonys101

Again with a flexible ISA you can remove money and re add it taking money out does not use up your allowance 

Forget regulars ISAs I am have a flexible ISA 

Again flexible ISA , flexible ISA I put £20,000 worth of shares and sold them then removed the cash.  So my allowance is back on nothing used as it flexible 

So I have zero in my flexible ISA 

The question I am asking , knowing that I have a flexbaile ISA 

- Can I open a regular non flexible isa and use that to buy a fund 

friolento said:

You can only ever add a total of £20k each tax year. You can spread the £20k over any number of ISAs but the only way to move some or all of the £20k from one ISA to another is through a formal ISA transfer. 

Whether your ISA is flexible or not doesn’t come into it

Bed & ISA does not give you a higher than £20k annual limit

Not sure whether this answers your questions, and I am not sure what you want to do & why. Can you explain further, and can you be precise on how much you deposited into which ISA(s) this year?

gravel_2

Money removed from a flexible ISA has to be deposited back into the ISA it was withdrawn from. Whether you still have 20k allowance depends one whether you have, in this tax year, paid any new money into any ISA product.

masonic

Tonys101 said:

Again flexible ISA , flexible ISA I put £20,000 worth of shares and sold them then removed the cash.  So my allowance is back on nothing used as it flexible

Firstly you cannot "put £20,000 worth of shares" in an ISA. You pay in £20,000 in cash and then buy the shares.

Let's say, as an example, you paid £20,000 into your flexible ISA on 10th April 2024, bought the shares, sold them again on 20th June, then removed the cash.

If that were true, Gravel is correct and you do not have your allowance back. Your allowance is still zero, but you can replace the £20,000 in your existing flexible ISA until 5th April 2025.

That would mean you cannot pay any money into any other ISA until 6th April 2025. But if course if you replaced the £20,000 into the Eqi flexible ISA you could then transfer that ISA elsewhere.

friolento

Tonys101 said:

Again with a flexible ISA you can remove money and re add it taking money out does not use up your allowance 

Forget regulars ISAs I am have a flexible ISA 

Again flexible ISA , flexible ISA I put £20,000 worth of shares and sold them then removed the cash.  So my allowance is back on nothing used as it flexible 

So I have zero in my flexible ISA 

The question I am asking , knowing that I have a flexbaile ISA 

- Can I open a regular non flexible isa and use that to buy a fund 

friolento said:

You can only ever add a total of £20k each tax year. You can spread the £20k over any number of ISAs but the only way to move some or all of the £20k from one ISA to another is through a formal ISA transfer. 

Whether your ISA is flexible or not doesn’t come into it

Bed & ISA does not give you a higher than £20k annual limit

Not sure whether this answers your questions, and I am not sure what you want to do & why. Can you explain further, and can you be precise on how much you deposited into which ISA(s) this year?

Your annual allowance is not different for different ISA types. It’s £20k per tax year.

If you deposit £20k into a flexible ISA, you have used your annual allowance. You can withdraw sone or all of the £20k but your annual allowance has been used and will not be affected by the withdrawal. You will not get a new annual allowance.

You can replace the withdrawn amount in the same ISA in the same tax year. Replacing withdrawn money does not give you a higher annual allowance.

If you have used your annual allowance, and then deposit additional money into a different ISA in the same tax year, you are violating ISA rules and HMRC will eventually be in touch. 

If you have not used all of your annual allowance, you are free to deposit into other ISAs, up to your annual limit. It is your responsibility to monitor how much of your annual allowance you have used. Again, withdrawing from a flexible ISA does not reduce the amount of annual allowance you have used.