Trading 212 cash ISA Allowance

danco

Looking at my Trading 212 cash ISA, I am surprised that it says that my remaining current tax year ISA allowance is £25,000. I thought the amount was only £20,000.

Is this an error on their part, or is one allowed to pay in to the previous year's ISA as well? That might make sense, since earlier today it showed the allowance remaining as £24,500, and I had withdrawn £500 between the two occasions I looked at the figures.

£20000 for this year, of which I have paid nothing in, plus being allowed a further £5000 for last year (where I have paid £15,000 in) makes some sort of sense, but I did not think the allowances worked that way.

On-the-coast

They don’t… it’s a £20k limit. 

Have you withdrawn £5k from a flexible ISA?

danco

I have put nothing in this year. More precisely, I put money in and have withdrawn it all, as the Trading212 cash ISA is flexible. I have withdrawn money from LAST year's ISA, and was wondering if I can still make a payment into that ISA as it is flexible. That seems to be the only way that what they say about the amount still permissible makes sense. But there is also the possibility, which might be even more likely, that they have got their figures wrong. 

Has anyone else found Trading212 showing a figure higher than £20,000 shown as the tax-free allowance?

slinger2

"LAST year's ISA"? So have you got 2 Cash ISAs with Trading212? Which one is showing a remaining allowance of £24,500? It's all very confusing for me. I could understand it if you had a single ISA.

booneruk

There's only one pot on T212 (Or so I strongly believe).

Say someone paid 20k in last financial year, paid nothing in but withdrew 5k this financial year, they would be able to pay 25k in now. 25k allowance being shown in this case is not an error. 

danco

No, only one ISA, but put money in last year, and then withdrew this year. My wording may have been confused, I should have referred to last year's allowance and this year's allowance rather than this year's ISA and last year's.
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Thanks, @booneruk. That's what it looks like, but I was unaware that the allowance worked that way.

eskbanker

danco said:

No, only one ISA, but put money in last year, and then withdrew this year. My wording may have been confused, I should have referred to last year's allowance and this year's allowance rather than this year's ISA and last year's.
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Thanks, @booneruk. That's what it looks like, but I was unaware that the allowance worked that way.

What were you expecting to see?  If you've withdrawn £5K from a flexible ISA then you can pay it back in within the same tax year, over and above the annual allowance for new money, so a single figure representing what you can pay in for the rest of the year has to include both amounts.

danco

From another thread I have been referred to https://www.gov.uk/guidance/manage-isa-subscriptions-for-your-investors#flexible-isas which mostly explains the situation. What I had been expecting to see turns out to be incorrect, so I won't repeat it.

But I still have some questions, though they are rather theoretical, not likely to occur in practice for me.

The link I have given mentions "previous year funds". Does that refer only to the year immediately preceding the current year, or does it go back as many years as the ISA has been active?

Also the reference mentions "replacement subscriptions". Does that mean that if I had put in £10,000 last year and then withdrew it this year, I can only replace £10,000 (plus £20,000 current year) or could I put in a full £20,000 for the previous year.

masonic

danco said:

The link I have given mentions "previous year funds". Does that refer only to the year immediately preceding the current year, or does it go back as many years as the ISA has been active?

Also the reference mentions "replacement subscriptions". Does that mean that if I had put in £10,000 last year and then withdrew it this year, I can only replace £10,000 (plus £20,000 current year) or could I put in a full £20,000 for the previous year.

Previous year refers to all years.

You can only replace funds you subscribed, so cannot resurrect unused allowance from prior years.

eskbanker

danco said:

The link I have given mentions "previous year funds". Does that refer only to the year immediately preceding the current year, or does it go back as many years as the ISA has been active?

The latter, i.e. any year other than the current one.

danco said:

Also the reference mentions "replacement subscriptions". Does that mean that if I had put in £10,000 last year and then withdrew it this year, I can only replace £10,000 (plus £20,000 current year) or could I put in a full £20,000 for the previous year.

The former, i.e. the annual allowance is 'use it or lose it' so if you don't use it all in one tax year, you can't make it up later.

danco

Yes, I did expect that it would be use it or lose it, as you have just told me.

Grammatically, "previous year" should only refer to one year, hence my question, but I am glad to know it does go back over all relevant years.