accidentally maxed out my ISA for a couple of hours forgetting I need to allow for LISA, consequence

mda99das

I accidentally maxed out my  current years ISA for a couple of hours forgetting I need to allow for LISA. I then realised my mistake and withdrew 4k from the ISA.
Will that affect my LISA? This all happened intra day, so I am hoping reporting is done at the end of the day and there wont be any issues. My ISA and LISA are with 2 different providers. 

pramsay13

I'm afraid you've to give up your firstborn. 

There won't be any consequence as you moved it out the same day so no interest was earned. 

Even if you'd left it for a while the only consequence is losing the tax relief on the extra money. 

Mark_d

Since you have already paid in your maximum ISA allowance you are no longer eligible to pay in to a LISA.  If you do pay in to a LISA then, at some point, HMRC will contact you and have your LISA investment returned to you.

masonic

Have you previously maxed out your LISA? If so then the ISA subscription was invalid and the LISA subscription is fine. 

HMRC is unlikely to do anything if it is your first offence.

eskbanker

Is your main ISA flexible?  If so, this would allow you to return the £4K into it and then arrange a transfer of £4K from there directly to your LISA, now that current year money can be split up.

Even if not flexible, you could transfer £4K from cash ISA (presumably?) to LISA - this would effectively 'waste' the £4K of your annual allowance that you withdrew but would at least allow legitimate use of the LISA for this year's £4K, which is typically more beneficial than a standard ISA....

mda99das

I have a T212 stocks and shares ISA, and the rest of the balance is "uninvested" but I do earn money market interest on this. My LISA is with AJ . I haven't put anything into the LISA yet, but given the current stock market pull back I wanted to drip feed it in and wanted to have dry power ready to go when the markets hit key daily moving averages

mda99das

I found this as well online

https://www.gov.uk/individual-savings-accounts/transferring-your-isa#:~:text=You can transfer all or,year or in previous years.

As I now have 16k in S&S ISA and zero contribution in my LISA then technically I could ask T212 to move 4k into my LISA with AJ

eskbanker

mda99das said:

I found this as well online

https://www.gov.uk/individual-savings-accounts/transferring-your-isa#:~:text=You can transfer all or,year or in previous years.

As I now have 16k in S&S ISA and zero contribution in my LISA then technically I could ask T212 to move 4k into my LISA with AJ

That's the transfer process I mentioned above, but it needs to be driven by the receiving provider, so you'd ask AJ Bell to initiate it.