Recent transfer of Junior ISA

ladystow5

My son has recently turned 18 and his Foresters Junior ISA has been reinvested into an ISA. They have written to him and say he has 30 days to cancel. If he wanted to just withdraw it all into his bank account it says he would be liable for government penalty. Does anyone know how this works? Is it a percentage of the value? It's currently worth just over £9k. He needs the money to fund university costs next year 

El_Torro

Any money taken out of an ISA becomes liable for tax on interest once it starts earning interest outside of the ISA. I guess this is what is meant by government penalty. 

He can take money out of the ISA without issue, there's no big fine from HMRC in doing this. Not yet at least...

eskbanker

ladystow5 said:

If he wanted to just withdraw it all into his bank account it says he would be liable for government penalty. Does anyone know how this works?

What's the exact wording used, as there shouldn't be any such penalty?

ladystow5

You may withdraw some or all of your investment, we will pay you all or a portion of the unit account value, less any applicable government penalty, effective on the later of the date you select 

eskbanker

ladystow5 said:

You may withdraw some or all of your investment, we will pay you all or a portion of the unit account value, less any applicable government penalty, effective on the later of the date you select 

I wonder if that perhaps relates to the penalty applicable specifically to the Lifetime ISA product, whereby any withdrawal other than for a first property purchase entails a 25% deduction?  If he has a standard cash or S&S ISA there shouldn't be anything like that though....