Flexible ISA - withdrawing and adding back in

A_N_R

I have £63,000 in an Flexible ISA topped up over previous tax years.

If I withdrew this for a property purchase, leaving in the minimum £1 to keep the ISA running, can I add the £63,000 back in before the end of the tax year when my current property sale completes?

I have read numerous articles which mention the flexibility of adding money back in from the current tax year ISA allowance but just looking for the reassurance I can return the full amount present in this tax year built up from previous tax years.

Thanks

Albermarle

A_N_R said:

I have £63,000 in an Flexible ISA topped up over previous tax years.

If I withdrew this for a property purchase, leaving in the minimum £1 to keep the ISA running, can I add the £63,000 back in before the end of the tax year when my current property sale completes?

I have read numerous articles which mention the flexibility of adding money back in from the current tax year ISA allowance but just looking for the reassurance I can return the full amount present in this tax year built up from previous tax years.

Thanks

OK to do that.

slinger2

There's much confusion about this. You'll need to replace it in the same tax year that you withdraw it. Also it'll need to go back into the same account.

vacheron

slinger2 said:

There's much confusion about this. You'll need to replace it in the same tax year that you withdraw it. Also it'll need to go back into the same account.

There certainly is! I've not needed to use a flexible ISA to withdraw / replace amounts over £20K, but I always assumed that it was only this year's contributions that you could withdraw. 

You learn something new every day here.

Albermarle

vacheron said:

slinger2 said:

There's much confusion about this. You'll need to replace it in the same tax year that you withdraw it. Also it'll need to go back into the same account.

There certainly is! I've not needed to use a flexible ISA to withdraw / replace amounts over £20K, but I always assumed that it was only this year's contributions that you could withdraw. 

You learn something new every day here.

Under new rules if you only withdraw this years funds, you can actually put them back into a new ISA altogether ( if you wanted to)
However if you withdraw previous years funds they have to go back into the same ISA account.
If you withdraw a mix of old and new funds , it could get complicated . Personally if I did this I would just put the lot  back into the ISA I withdrew them from to avoid any problems.

masonic

Albermarle said:

vacheron said:

slinger2 said:

There's much confusion about this. You'll need to replace it in the same tax year that you withdraw it. Also it'll need to go back into the same account.

There certainly is! I've not needed to use a flexible ISA to withdraw / replace amounts over £20K, but I always assumed that it was only this year's contributions that you could withdraw. 

You learn something new every day here.

Under new rules if you only withdraw this years funds, you can actually put them back into a new ISA altogether ( if you wanted to)
However if you withdraw previous years funds they have to go back into the same ISA account.
If you withdraw a mix of old and new funds , it could get complicated . Personally if I did this I would just put the lot  back into the ISA I withdrew them from to avoid any problems.

This issue, which can bite even those only withdrawing from previous years, is that a couple of providers have reportedly been treating replacement subscriptions as new subscriptions up to the £20k annual allowance, even though this is contrary to the rules. So it is important for anyone using previous year flexibility to verify that their replacement subscriptions are being treated correctly.

subjecttocontract

That's madness.
I have a flexible cash isa. It contains prior year subscriptions only. I withdraw money from it and pay it back into the same account, later but in the same tax year. The money I pay back into the isa cannot be a new subscription because this year's new cash Isa subscription has already been paid into a different Isa account with a different provider for which I have evidence. So, why is it important to check ? I won't have broken any rules and don't see how I would be disadvantaged.

wmb194

subjecttocontract said:

That's madness.
I have a flexible cash isa. It contains prior year subscriptions only. I withdraw money from it and pay it back into the same account, later but in the same tax year. The money I pay back into the isa cannot be a new subscription because this year's new cash Isa subscription has already been paid into a different Isa account with a different provider for which I have evidence. So, why is it important to check ? I won't have broken any rules and don't see how I would be disadvantaged.

Because HMRC will receive incorrect data and, if it feels inclined, can make your Isa a taxable account. It'll be better to try to head this off by keeping a close eye on the way your providers are treating replacement deposits. 

subjecttocontract

Well that's for you to do if you want but it's not for me. I see my journey through life as complying with the rules, not spending time checking wether ISA providers understand their job. Any mistakes by HMRC will be corrected.

wmb194

subjecttocontract said:

Well that's for you to do if you want but it's not for me. I see my journey through life as complying with the rules, not spending time checking wether ISA providers understand their job. Any mistakes by HMRC will be corrected.

It's up to you but I want to avoid the aggravation of dealing with HMRC and/or a provider liaising with one another to settle the issue. IMO it's better to do what another poster on another thread did with T212 where they pointed out the mistake and T212 appears to have corrected its systems in year.

Albermarle

wmb194 said:

subjecttocontract said:

Well that's for you to do if you want but it's not for me. I see my journey through life as complying with the rules, not spending time checking wether ISA providers understand their job. Any mistakes by HMRC will be corrected.

It's up to you but I want to avoid the aggravation of dealing with HMRC and/or a provider liaising with one another to settle the issue. IMO it's better to do what another poster on another thread did with T212 where they pointed out the mistake and T212 appears to have corrected its systems in year.

Hopefully any other errant ISA providers, will do the same as T212 at some point, and the issue will disappear