Question about flexibility on past years contribution.

Growingold

I have a flexible ISA made up of past years contributions.

For simplicity say these contributions total £6,000 but £3,000 has already  been withdrawn this tax year leaving a balance of £3,000 with being able to add the withdrawn contributions back before the end of the tax year.

If I was to transfer £2,000 of the remaining balance to another provider am I correct in thinking I would still be able to add the withdrawn £3,000 back to the original ISA?

So instead of having past years contributions of £6,000 with the original provider it would now be £4,000 which would still be flexible.  Is this correct?

Thank you for your thoughts.

surreysaver

The bank has no way of knowing which pound is which pound. 

slinger2

Seems ok. The main rule is that money withdrawn from a flexible ISA needs to replaced in the same ISA in the same tax year, otherwise it'll count as part of your £20k allowance.

surreysaver

And its probably wise to repay any money, either previous years or this year's, into an ISA prior to doing a transfer. I'm not sure whether ISA providers also transfer any allowances where you've withdrawn money, unless someone can correct me on that?

eskbanker

surreysaver said:

And its probably wise to repay any money, either previous years or this year's, into an ISA prior to doing a transfer. I'm not sure whether ISA providers also transfer any allowances where you've withdrawn money, unless someone can correct me on that?

As OP is referring to an ISA exclusively populated with prior year money, there won't be any concept of unused allowances accompanying any transfer.

In any case, they were envisaging a partial transfer, so if the original ISA remains open, they can continue to replace flexibly withdrawn amounts into it....