Paid into S&S ISA as non UK tax resident

gecafo99

Hello,

I was UK tax resident for the past 4 years, in which I had a S&S ISA.
For 2024-2025, I paid a lump sum of 20k on 10 April 2024 and then in June moved abroad.
I won't be coming back until the end of the tax year, so according to the SRT that'll make me non-UK tax resident for the entire 2024-2025 tax year.

Does it make my 20k contribution back in April as non-eligible? And what to get that rectified?
I tried to call HMRC but they just hang up after 1 hour waiting in line...

Thanks

eskbanker

I'm sure the main gov.uk ISA pages used to say that you were no longer allowed to pay into an ISA after the end of the tax year in which you moved abroad (which would obviously be OK for your situation), but it doesn't say that now!

Edit: yes, the wording has been changed a couple of weeks ago to refer to residency....

7 January:

If you open an Individual Savings Account (ISA) in the UK then move abroad, you cannot put money into it after the tax year that you move (unless you’re a Crown employee working overseas or their spouse or civil partner).

https://web.archive.org/web/20250107140752/https://www.gov.uk/individual-savings-accounts/if-you-move-abroad

15 January (onwards):

If you open an Individual Savings Account (ISA) in the UK then move abroad and become a non-UK resident, you cannot put money into it (unless you’re a Crown employee working overseas or their spouse or civil partner).

https://web.archive.org/web/20250115011117/https://www.gov.uk/individual-savings-accounts/if-you-move-abroad

gecafo99

Just note. I'll be non UK resident for the entire 2024-2025, no split year treatment or anything like that.  Shouldn't the ISA be voided? If yes then how? I contacted my provider (T212) and they know nothing about how to void an ISA (although they should as they are regulated)

eskbanker

https://www.gov.uk/guidance/who-can-invest-in-an-isa-if-youre-an-isa-manager#the-residence-qualification might be worth a read, although it seems to me to be open to interpretation!

Investors must notify you if they no longer meet the residence qualification because they:

• have become non-resident
• no longer work as a Crown employee serving overseas
• are no longer married to, or in a civil partnership with, an eligible person

If this happens, an existing ISA does not need to be closed, but no further subscriptions to the ISA can be made apart from the exceptions to the rule, unless the investor meets the residence qualification again.

Some circumstances result in all subscriptions to an ISA made in that year, including any income or growth relating to those subscriptions (other than the exceptions), needing to be removed and any Lifetime ISA bonus received for that year returned to HMRC. 

This can happen if the investor:

• declares in the tax year that they are non-resident — the subscriptions cannot be reinstated after the tax year end even if the investor later establishes they were a resident

gecafo99

Yah I don't know anymore. Asked around, and a guy replied to me that he was in the same situation and contacted HMRC and they said it's fine.
Sent an email to savings.audit@hmrc.gov.uk , let's see what they say..

masonic

I really can't see how it could be a problem, since you cannot go back in time an undo an ISA subscription made at the start of the tax year if you subsequently decide to leave the country (or extend what was originally intended to be a shorter spell abroad).

boingy

I'd take no further action unless prompted. You tried to ring HMRC and you asked your ISA provider. If they void it, they void it.

gecafo99

Hello,
So a few updates on that.
Called HMRC and asked in the online chat.
They both said it's fine, as, the money are eligible.
Although, they were just reading their guidance online and I felt like they didn't know the answer themselves. So not sure what to do

masonic

I would do nothing. You've already made an attempt to raise the matter with HMRC and have been reassured that they don't consider it a problem. If that changes, you can refer them to your previous contact over the issue.

It is for HMRC to take action, not the provider or you, so there isn't really anything you could do beyond what you have already done.