Flexible ISA and non-flexible ISA annual allowance rules

rio600

Hi. Is someone able to explain how I calculate my remaining ISA annual allowance? I have a flexible cash ISA and a non-flexible S&S ISA with different providers. I've paid £2000 into my non-flexible S&S ISA in the 24/25 tax year and it says I have 18,000 left of my 20,000 allowance. Throughout the 24/25 tax year I've paid a total of £20000 into my flexible cash ISA but I've also withdrawn a total of £5000 throughout the same tax year and it says I have 15,000 left of my 20,000 allowance. If I make no more withdrawals from my flexible ISA, I assume the maximum I can now pay this tax year into either my flexible cash or non-flexible S&S ISA is £3000. Is this correct? Thanks

sammy_zammy

Yes - when you put withdraw money from a flexible ISA, you can add the money back to that specific ISA only and it won’t add to the 20k limit.

However, if the money was paid in during the current tax year, it still counts towards your overall ISA allowance when you remove it. Can you clarify the order of events? If you removed 5k from a previous tax year then added 20k then you’re fine. If you added 20k then removed 5k, you’ve gone 2k over your ISA limit due to the contributions to the other ISA.

slinger2

It's more complicated than that. The order that you paid new money in, withdrew it and replaced that withdrawn money is important. The allowance used in your flexible ISA is the "high water mark" of your new contributions.

eg pay in £10k of new money, withdraw £5k, add other £10k (that would be £5k replacement of the withdrawn £5k + £5k of new money). You've now got £15k in the account and have subscribed £15k of new money.

However pay in £10k of new money, add other £10k (that would be £10k of new money), withdraw £5k. You've now got £15k in the account but in this case you've subscribed £20k of new money and you've broken all the rules if you added new money to another ISA.

In other words you can't get any of your allowance back simply by withdrawing money from a flexible ISA. What you can do is withdraw from a Flexible ISA and replace it in the same ISA before the end of the same tax year.

saajan_12

rio600 said:

Hi. Is someone able to explain how I calculate my remaining ISA annual allowance? I have a flexible cash ISA and a non-flexible S&S ISA with different providers. I've paid £2000 into my non-flexible S&S ISA in the 24/25 tax year and it says I have 18,000 left of my 20,000 allowance. Throughout the 24/25 tax year I've paid a total of £20000 into my flexible cash ISA but I've also withdrawn a total of £5000 throughout the same tax year and it says I have 15,000 left of my 20,000 allowance. If I make no more withdrawals from my flexible ISA, I assume the maximum I can now pay this tax year into either my flexible cash or non-flexible S&S ISA is £3000. Is this correct? Thanks

One of the figures in bold looks incorrect. 

slinger2

saajan_12 said:

rio600 said:

Hi. Is someone able to explain how I calculate my remaining ISA annual allowance? I have a flexible cash ISA and a non-flexible S&S ISA with different providers. I've paid £2000 into my non-flexible S&S ISA in the 24/25 tax year and it says I have 18,000 left of my 20,000 allowance. Throughout the 24/25 tax year I've paid a total of £20000 into my flexible cash ISA but I've also withdrawn a total of £5000 throughout the same tax year and it says I have 15,000 left of my 20,000 allowance. If I make no more withdrawals from my flexible ISA, I assume the maximum I can now pay this tax year into either my flexible cash or non-flexible S&S ISA is £3000. Is this correct? Thanks

One of the figures in bold looks incorrect. 

As I note above, it could be true depending on the order of payments.

It's also worth noting that the rules changed on 6 Apr 2024 so that you can now only replace money into the ISA you withdrew it from (in the same tax year). Previously the rules were different (you could replace it into a different ISA) and some providers have not updated their software to reflect the new rule.

rio600

I've been depositing and withdrawing money from my flexible cash ISA throughout the year. My provider has never said said my allowance had exceeded the 20K. The highest it got was something like 17.5K of my 20K allowance. Currently, it says 13K of 20K allowance as I withdrew some money recently. I've just gone back and worked out the contributions that I've made throughout the tax year and it was actually 30K! This was because one month I'd add 3K and then a couple of weeks later, withdraw 4K for example. The 2K contribution into my non flexible S&S ISA was made in October last year.

slinger2

It's not just to do with "depositing and withdrawing money". It's to do with "depositing, withdrawing and replacing money". If you withdraw £4k (for example) the next payment into the flexible ISA (in the same tax year) is (at least partly) a replacement, not a deposit. You need to distinguish between the two.

Archerychick

Each provider is only able to report on money that you have deposited with them, which is why you have each provider saying £20k is your allowance. They can’t see new money that you add with other providers 

rio600

My flexible cash ISA provider (Zopa) has been telling me allowance throughout the year, for example:

April +5000 = 15000 remaining of 20000 allowance

May -2000 = 17000 remaining of 20000 allowance

June +5000 = 12000 remaining of 20000 allowance

July -2000 = 14000 remaining of 20000 allowance

Aug +10000 = 4000 remaining of 20000 allowance

Sept -4000 = 8000 remaining of 20000 allowance

Oct +3000 = 5000 remaining of 20000 allowance

Nov +3000 = 2000 remaining of 20000 allowance

Dev -2000 = 4000 remaining of 20000 allowance

Jan +3000 = 1000 remaining of 20000 allowance

Feb -4500 = 5500 remaining of 20000 allowance

Therefore, I've deposited 29K and withdrew 14.5K which is a net contribution of 14.5K, and Zopa shows 5500 remaining of 20000 allowance in their app.

The 2K contribution I made into my Nutmeg S&S ISA was a one off payment I made in October last year.

slinger2

rio600 said:

My flexible cash ISA provider (Zopa) has been telling me allowance throughout the year, for example:

April +5000 = 15000 remaining of 20000 allowance

May -2000 = 17000 remaining of 20000 allowance

June +5000 = 12000 remaining of 20000 allowance

July -2000 = 14000 remaining of 20000 allowance

Aug +10000 = 4000 remaining of 20000 allowance

Sept -4000 = 8000 remaining of 20000 allowance

Oct +3000 = 5000 remaining of 20000 allowance

Nov +3000 = 2000 remaining of 20000 allowance

Dev -2000 = 4000 remaining of 20000 allowance

Jan +3000 = 1000 remaining of 20000 allowance

Feb -4500 = 5500 remaining of 20000 allowance

Therefore, I've deposited 29K and withdrew 14.5K which is a net contribution of 14.5K, and Zopa shows 5500 remaining of 20000 allowance in their app.

The 2K contribution I made into my Nutmeg S&S ISA was a one off payment I made in October last year.

I'm afraid Zopa is telling you nonsense. I can see that in January you only had "1000 remaining" so had used £19,000 of your allowance. You can't get £4,500 back by withdrawing, despite what Zopa says. So with £2k in your other ISA you've gone over the £20k limit (19+2).

rio600

slinger2 said:

rio600 said:

My flexible cash ISA provider (Zopa) has been telling me allowance throughout the year, for example:

April +5000 = 15000 remaining of 20000 allowance

May -2000 = 17000 remaining of 20000 allowance

June +5000 = 12000 remaining of 20000 allowance

July -2000 = 14000 remaining of 20000 allowance

Aug +10000 = 4000 remaining of 20000 allowance

Sept -4000 = 8000 remaining of 20000 allowance

Oct +3000 = 5000 remaining of 20000 allowance

Nov +3000 = 2000 remaining of 20000 allowance

Dev -2000 = 4000 remaining of 20000 allowance

Jan +3000 = 1000 remaining of 20000 allowance

Feb -4500 = 5500 remaining of 20000 allowance

Therefore, I've deposited 29K and withdrew 14.5K which is a net contribution of 14.5K, and Zopa shows 5500 remaining of 20000 allowance in their app.

The 2K contribution I made into my Nutmeg S&S ISA was a one off payment I made in October last year.

I'm afraid Zopa is telling you nonsense. I can see that in January you only had "1000 remaining" so had used £19,000 of your allowance. You can't get £4,500 back by withdrawing, despite what Zopa says. So with £2k in your other ISA you've gone over the £20k limit (19+2).

Ah, I see now. The "high water mark" you mentioned makes sense now

Thanks so much slinger2 and everyone else for their inputs.