Easy access Cash ISA - withdrawing and returning cash

typeanonspare

Pretty sure I already know the answer to this but if someone could confirm that would be great.

I have put £20k into my easy access Cash ISA this tax year, i.e. the full allowance.

If I want to say withdraw £8k, but then return this £8k after this current tax year ends, i.e. 6th April 2025 or later, I can do this but my allowance next year would only be £12k?

Is that correct?

Thank you

Rodders53

Yes.  That's next tax year not this and would be new funding rather than replacement.

Warning!  Flexible ISAs are needed for withdrawal and replacement in the same tax year.  Easy access ISAs are not always flexible, depends on the ISA provider.

Ayr_Rage

Assuming the ISA allows withdrawals but is NOT flexible.

You can take out £8000 before the end of the tax year but you cannot replace that money this tax year.

From 6 April 2025, assuming the ISA continues and allows further deposits then you can add your whole £20000 allowance.

The previous withdrawal is irrelevant.

jimjames

typeanonspare said:

If I want to say withdraw £8k, but then return this £8k after this current tax year ends, i.e. 6th April 2025 or later, I can do this but my allowance next year would only be £12k?
Is that correct?

Yes it is correct. However if somehow you are able to pay back in £8k on 5th April it maintains your allowance so you could take out £8k again on 6th April and would still have £20k allowance remaining for 2025/26 tax year. As above it assumed the ISA is flexible too.

typeanonspare

Thanks all. It is the T212 flexible cash ISA for info.

typeanonspare

Ayr_Rage said:

Assuming the ISA allows withdrawals but is NOT flexible.

You can take out £8000 before the end of the tax year but you cannot replace that money this tax year.

From 6 April 2025, assuming the ISA continues and allows further deposits then you can add your whole £20000 allowance.

The previous withdrawal is irrelevant.

I hear what you are saying about the previous withdrawal being irrelevant, and the fact that I can put another £20k in from 6th April 2025 onwards, but NET it would only be £12k wouldn't it. I can't put in £20k, plus the £8k I took out this tax year.

So despite being able to put a new £20k in, the ISA would in fact only have an extra £12k in, due to the previous withdrawal. That's the point I was trying to make in my post.

I can return the £8k, but that would only then leave £12k left of my allowance, not the full £20k, assuming the returning of the £8k is 6th April 2025 or later.

eskbanker

typeanonspare said:

Ayr_Rage said:

Assuming the ISA allows withdrawals but is NOT flexible.

You can take out £8000 before the end of the tax year but you cannot replace that money this tax year.

From 6 April 2025, assuming the ISA continues and allows further deposits then you can add your whole £20000 allowance.

The previous withdrawal is irrelevant.

I hear what you are saying about the previous withdrawal being irrelevant, and the fact that I can put another £20k in from 6th April 2025 onwards, but NET it would only be £12k wouldn't it. I can't put in £20k, plus the £8k I took out this tax year.

So despite being able to put a new £20k in, the ISA would in fact only have an extra £12k in, due to the previous withdrawal. That's the point I was trying to make in my post.

I can return the £8k, but that would only then leave £12k left of my allowance, not the full £20k, assuming the returning of the £8k is 6th April 2025 or later.

I think the best way to look at it is that you can only 'return' withdrawn money to a flexible ISA if you do so in the same tax year - once the new tax year starts you can't 'return' it as such anymore and can only contribute new money, even if you choose to perceive some of it as old money.

pochisoldi

Another thing to bear in mind is that non-ISA money* paid into an flexible ISA is treated as :
1) Replacing money withdrawn from previous year's subscriptions; once all that's replaced...
2) Replacing money withdrawn from this year's subscriptions; then once all that's replaced...
3) Treated as new subscriptions.

Also note that flexible ISA providers report "net current year's" subscriptions at the end of the year.
for example: If you deposit £20k of new money, withdraw £20k of new money at AN Other Bank in the same tax year, the net subscription for the year is £0.

* "non-ISA money" = money that hasn't been transferred in from another ISA