Keeping track of isa allowance

dont_use_vistaprint

Now that you can have multiple accounts for isa savings & some are replaceable funds and with rates changing & transfers it seems inevitable people will make mistakes and inadvertently exceed the £20k


Will HMRC track it and inform
you ?


What actions will they take ? 

For myself I’m below my personal allowance so not paying tax anyway so I’m presuming if I replaced 20K into a higher interest account there’s still no tax due so no consequences ? 

masonic

Eventually, but it could be years later. They are quite forgiving of a first offence, but it's not something it would be advisable to do repeatedly as they have the option to void the ISA and treat the interest as taxable. Potentially no consequences if you wouldn't have paid tax if it wasn't an ISA.

Northern_Wanderer

With all the different rules, and flexible ISA's I'm finding it a pain to decifer what is this year money and what is previous years money. Makes it tricky to do a transfer when you can tranfser any amount of previous years allowance but only full amount of current years if you have withdrawn and paid back into same ISA. Probably easiest to keep current years and previous years amount in separate accounts. 

Some providers tell you how much you have left of your allowance in that account but others don't. And some providers tell you it's current years money when it is not!

born_again

Best way.
Simple spread sheet or other document. List each provider & amount you have paid in to each one, per year. Can easily work out when £20K allowance is reached.

masonic

Northern_Wanderer said:

Some providers tell you how much you have left of your allowance in that account but others don't. And some providers tell you it's current years money when it is not!

All providers must be able to tell you how much is left of your allowance. While it is a pain to have to ask, doing so might encourage them to make the information more readily available.

I've not personally come across any provider who doesn't tell you when you go through the motions of adding money.

The incorrect treatment of replacement subscriptions at T212 should now be resolved, I don't know if there were others assigning this incorrectly.

Northern_Wanderer

masonic said:

Northern_Wanderer said:

Some providers tell you how much you have left of your allowance in that account but others don't. And some providers tell you it's current years money when it is not!

The incorrect treatment of replacement subscriptions at T212 should now be resolved, I don't know if there were others assigning this incorrectly.

If I remember correctly, I did a transfer out of a VM ISA, they sent me a letter saying I'd transferred current years funds so couldn't subscribe until next year, but was actually previous years funds which I checked with the receiving bank who confirmed it to be previous years. 

Northern_Wanderer

born_again said:

Best way.
Simple spread sheet or other document. List each provider & amount you have paid in to each one, per year. Can easily work out when £20K allowance is reached.

I always meant to do this, I just don't think we should have to! I spent about a half hour the other day, puzzled, trying to separate years in a flexible ISA with money added to current years subscription then an amount withdrawn (which can still be repaid), just to see how much I was transferring from the correct year. I should have just transferred the lot but because it's flexible I wanted to keep it open in case I wish to repay.....confusing.....

dont_use_vistaprint

If you take previous years out is it also replaceable in the same year on flexible ISA ? 

I took a chunk out plus this years when as a current/forseeable future non-taxpayer I could get much better income  and now T212 It’s showing it all as replaceable ? 

clairec666

dont_use_vistaprint said:

If you take previous years out is it also replaceable in the same year on flexible ISA ? 

I took a chunk out plus this years when as a current/forseeable future non-taxpayer I could get much better income  and now T212 It’s showing it all as replaceable ? 

If you've withdrawn previous years funds from Trading 212 on or since 6/4 this year, then Trading 212 will show this as "replaceable funds", and this must be returned to the same ISA by 5/4 next year, i.e. by the end of the tax year. On 6/4/2026 Trading 212 will presumably reset the "replaceable funds" to £0.

If you're not paying tax then yes, you could probably earn more interest on it elsewhere. Then you can weigh up whether it's worth putting it back into the ISA at the end of the tax year to potentially protect it from tax in future years. Technically nothing to stop you withdrawing it again after a couple of days and doing the same thing again for the 26/27 tax year.

dont_use_vistaprint

clairec666 said:

dont_use_vistaprint said:

If you take previous years out is it also replaceable in the same year on flexible ISA ? 

I took a chunk out plus this years when as a current/forseeable future non-taxpayer I could get much better income  and now T212 It’s showing it all as replaceable ? 

If you've withdrawn previous years funds from Trading 212 on or since 6/4 this year, then Trading 212 will show this as "replaceable funds", and this must be returned to the same ISA by 5/4 next year, i.e. by the end of the tax year. On 6/4/2026 Trading 212 will presumably reset the "replaceable funds" to £0.

If you're not paying tax then yes, you could probably earn more interest on it elsewhere. Then you can weigh up whether it's worth putting it back into the ISA at the end of the tax year to potentially protect it from tax in future years. Technically nothing to stop you withdrawing it again after a couple of days and doing the same thing again for the 26/27 tax year.

Yes that’s what im doing and keeping within 75K per org  as I have multiple accounts on them, it’s not a trivial exercise to track !  Though the trend seems to be to match the best rates in ISA’s  now, there’s no guarantee that will continue and eventually with state pension tax will apply again so makes sense to at least be able to shift everything back to ISA permanently if needed.