ISA big screw-up?

masonic

Frosty_Jack said:

Visited a branch. They said it's all fine,  because it's all done under the Nationwide umbrella. Different if the money went out to a different bank.

To be clear, what they are telling you is that Nationwide run a portfolio ISA (aka split-ISA), so they treat all of the ISA accounts you hold with them as a single ISA.

What you did was flexibly withdraw your money into a savings account and then make replacement subscriptions. All within the ISA flexibility rules because the two accounts were treated as pots within a single ISA.

This would not have worked had it not been for the split-ISA treatment. Withdrawing to a savings account within the same bank and then to a different ISA account is not generally ok to do as an alternative to an ISA transfer. It must be quite a relief to have been given this lucky escape!

wmb194 said:

Frosty_Jack said:

Visited a branch. They said it's all fine,  because it's all done under the Nationwide umbrella. Different if the money went out to a different bank.

BIB; as long as they were both flexible it still would have been okay.

This is only true of current year subscriptions. Previous year subscriptions cannot be moved between different flexible ISAs via withdrawal. So if OP had paid in £20k during the current tax year, and had £20k from the previous tax year, only £20k would be accepted by the other bank.

Kim_13

wmb194 said:

Frosty_Jack said:

Visited a branch. They said it's all fine,  because it's all done under the Nationwide umbrella. Different if the money went out to a different bank.

BIB; as long as they were both flexible it still would have been okay.

Not for prior year funds, as those still have to be replaced into the same ISA as they were withdrawn from. 

I had thought portfolio ISAs were redundant since multiple ISAs per tax year were permitted, but they clearly made the difference here.