isa rules

hoppy2

can anyone clarify the isa rules for me. I had the full allowance in a cash isa and withdrew it all for a purchase (which didn't happen), can I reinvest the full amount with a  different provider that pays a higher rate? 

refluxer

Just to clarify - you've paid £20k into a cash ISA during the current tax year ? If so, my understanding is that you'll only be able to replace that money if it was a flexible ISA and if the account is still open, so that you can pay the money back into the same account.

If that's not the case, then paying £20k into a new cash ISA would count again towards this tax year's ISA allowance and therefore wouldn't be allowed.

masonic

You can reinvest the full amount wherever you like if you wait until the 6th April so that it counts against the 2025/26 allowance.

vacheron

hoppy2 said:

can anyone clarify the isa rules for me. I had the full allowance in a cash isa and withdrew it all for a purchase (which didn't happen), can I reinvest the full amount with a  different provider that pays a higher rate? 

If your cash ISA is a flexible ISA, then you can replace any money you have added and then withdrawn in the 24-25 tax year before the end of the tax year.

My understanding of the flexible ISA rules is that you can only replace the funds back into the original account, however, I don't believe there will be anything stopping you from doing this and then transferring the entire ISA to the different provider providing they allow transfers in. 

You could then add a further 20K to this after April 6th.

jimjames

hoppy2 said:

can anyone clarify the isa rules for me. I had the full allowance in a cash isa and withdrew it all for a purchase (which didn't happen), can I reinvest the full amount with a  different provider that pays a higher rate? 

No but if it was a flexible ISA you can repay it into the existing ISA before 5th April. You could then transfer that ISA to a better paying one. Or as above just pay in after 5th April to any ISA you choose.

Ayr_Rage

The answer is NO (assuming the funds are this year's money).

You cannot put funds into an account with another provider that pays higher interest this tax year.

You can replace the funds into the original ISA only if it was a flexible ISA.

slinger2

As noted: If the original ISA wasn't a flexible ISA you've lost your 24/25 allowance, it's gone forever. If it was a flexible ISA you can replace that money in the original ISA before the end of the tax year (ie. in the next few days). You could then "transfer" the ISA to another provider. Of course, you'll have a new £20k allowance on 6 April 2025.