Can I simply withdraw from my Cash ISA and deposit the money into my Stocks & Shares ISA?

JadeHighland

I have a Trading 212 cash ISA with £18,000. I also have a Vanguard stocks and shares ISA with £2,000. Both in the current tax year. 

They both style themselves as flexible ISAs. If I withdraw from one, the ISA allowances increases accordingly. 

I think I have too much in cash, as I don't need it for anything urgent. Any issue with me just withdrawing £10,000 from Trading 212 and depositing it into my Vanguard account? 

Ayr_Rage

Any funds withdrawn can only go back into the same ISA under the latest flexible ISA rules.

RobfromCornwall

You can't do that.  

But you can do an ISA transfer (initiated by the receiving account) from the Cash ISA to the S&S ISA.

HappyHarry

JadeHighland said:

I have a Trading 212 cash ISA with £18,000. I also have a Vanguard stocks and shares ISA with £2,000. Both in the current tax year. 

Just to clarify - you haven’t contributed more than £20,000 in total across all your ISAs this tax year, have you?

JadeHighland

HappyHarry said:

JadeHighland said:

I have a Trading 212 cash ISA with £18,000. I also have a Vanguard stocks and shares ISA with £2,000. Both in the current tax year. 

Just to clarify - you haven’t contributed more than £20,000 in total across all your ISAs this tax year, have you?

 That's correct 

Yorkie1

RobfromCornwall said:

You can't do that.  

But you can do an ISA transfer (initiated by the receiving account) from the Cash ISA to the S&S ISA.

Just wondering whether, given it's this year's funds, it would be possible to transfer only part of this year's funds in the cash ISA. Something at the back of my mind is hinting that if transferring funds, all of the current year's deposits must be moved. 

But that might have changed with the recent relaxation of the rules with flexible ISAs??

Kim_13

Yorkie1 said:

RobfromCornwall said:

You can't do that.  

But you can do an ISA transfer (initiated by the receiving account) from the Cash ISA to the S&S ISA.

Just wondering whether, given it's this year's funds, it would be possible to transfer only part of this year's funds in the cash ISA. Something at the back of my mind is hinting that if transferring funds, all of the current year's deposits must be moved. 

But that might have changed with the recent relaxation of the rules with flexible ISAs??

IIRC the new rules now permit this, but it is up to providers whether to offer it or not.

orange-juice

Since you can now open and fund more than one of each type of isa in the same financial year, you can open a S&S ISA with T212 and move the funds across from the cash ISA. T212 reports in as an official isa transfer so it doesn’t affect your allowance. The T212 S&S ISA only offers etfs  though so bear that in mind.

masonic

orange-juice said:

The T212 S&S ISA only offers etfs  though so bear that in mind.

...and individual shares, and investment trusts.

JadeHighland

Out of curiosity, what happens if I just do it? My understanding is that ISA providers report to HMRC at the end of the tax year. If by then both are within their limit, how does HMRC even know/care that I moved money across? 

masonic

JadeHighland said:

Out of curiosity, what happens if I just do it? My understanding is that ISA providers report to HMRC at the end of the tax year. If by then both are within their limit, how does HMRC even know/care that I moved money across? 

The reporting system used for previous tax years wouldn't have picked it up. There is the potential for HMRC to amend the system so that instead of reporting net subscriptions at year end, providers report max allowance used (ie a high water mark rather than year end figure). This may or may not happen in time for the end of this tax year.

They will care because there was concern about people gaming the system and subscribing multiples of £20k during the tax year before withdrawing down to £20k total at the end of the tax year to avoid detection. Enough concern to amend the ISA legislation to counter it.