Funds within an S&S ISA - Selling query

Laurina25

I currently have a S&S ISA and within the ISA I have 2 ETF's (S&P 500 & FTSE 100) I have £8K in one and £5K in another. I want to change the FTSE fund to another fund. If I sell my £5K fund, do I lose that allowance for the 24/25 year or can I replace it with a new fund? 

Provider is Chip and the reason I am unsure is when I go to sell the fund, it states the money will go straight into my bank and not stay within the Chip app which makes me think I will lose that allowance.

Any thoughts?

Thanks,

eskbanker

The £20K annual allowance relates to money paid into the ISA wrapper from outside, so isn't affected by the sale and repurchase of investments within the ISA, but worth clarifying the confusing message with Chip, i.e. validating that the proceeds can be kept within the ISA.

Having said that, it doesn't really matter for flexible ISAs, as withdrawals can be replenished without affecting the contribution allowance anyway:

​Is the Stocks and Shares ISA a Flexible ISA?

Yes, it is! This means that you have the freedom to withdraw money from your Stocks and Shares ISA, and then pay it back in at a later date (within the same tax year), without it counting against your annual £20,000 ISA allowance.

https://intercom.help/get-chip/en/articles/5183682-stocks-and-shares-isas-explained

Laurina25

That's really helpful. Thank you.