Isa Flexibility with different providers

FizbanLondon

Hi,

just spent an hour waiting to speak to HMRC and support was totally clueless about ISA, let alone specific question, so hoping somebody here could help me.

I've maxed my 20k cash isa with Chip for this financial year.

Since then I've decided to invest some in Shares ISA with Trading 212, both accounts are flexible.

I'd withdraw part of cash isa from Chip to my bank and then fund shares isa with Trading 212, and it seems this is the wrong way to do it.

If this is wrong way to do, what shall I do?  Sell everything in my Shares Isa and put back in Chip cash isa. What about profit I've made while in Shares Isa?

Thanks all.

Albermarle

You should not add more than 20K of new money to an ISA each tax year.
You have added £20K to the cash ISA and then some more new money to the T212 ISA, so you have gone over the limit. The fact you have withdrawn some from the cash ISA is not relevant.
What you should have done is ask T212 to transfer some of the Cash ISA over from the other provider, as transfers do not count as new money. Although the cash ISA provider may not have allowed part transfers anyway.
I would do nothing. HMRC may or may not contact you. It is not exactly a hanging offence and they are usually lenient with first offenders.

masonic

(checks date of thread) There is no problem with what you have done. You are permitted to withdraw current year money from a flexible ISA and then re-deposit it into a different ISA (which may or may not be flexible).

Ch1ll1Phlakes

masonic said:

(checks date of thread) There is no problem with what you have done. You are permitted to withdraw current year money from a flexible ISA and then re-deposit it into a different ISA (which may or may not be flexible).

I second this. The ISA rules around flexibly for current year subscriptions has changed to allow the above. This change somewhat complicates the rules though so much so that different government pages show different information.

FizbanLondon

Thanks all for answers but still not 100% sure on what to do. Seems its best to leave this as it is, and see if HMRC will contact me after the end of this financial year.

masonic

FizbanLondon said:

Thanks all for answers but still not 100% sure on what to do. Seems its best to leave this as it is, and see if HMRC will contact me after the end of this financial year.

What you have done is allowed within the rules, so there is no risk of HMRC taking any action.

FizbanLondon

masonic said:

FizbanLondon said:

Thanks all for answers but still not 100% sure on what to do. Seems its best to leave this as it is, and see if HMRC will contact me after the end of this financial year.

What you have done is allowed within the rules, so there is no risk of HMRC taking any action.

great, thanks for confirming!

I guess, I can keep doing it then

masonic

Just make sure the ISA you withdraw from is flexible, and you only move money added in the current tax year in this way (which doesn't include any interest/gains).

clairec666

Albermarle said:

You should not add more than 20K of new money to an ISA each tax year.
You have added £20K to the cash ISA and then some more new money to the T212 ISA, so you have gone over the limit. The fact you have withdrawn some from the cash ISA is not relevant.
What you should have done is ask T212 to transfer some of the Cash ISA over from the other provider, as transfers do not count as new money. Although the cash ISA provider may not have allowed part transfers anyway.
I would do nothing. HMRC may or may not contact you. It is not exactly a hanging offence and they are usually lenient with first offenders.

I think the OP meant that they intend to put money into the Trading 212 ISA, but haven't done it yet, so haven't broken the 20K limit yet.

masonic

clairec666 said:

Albermarle said:

You should not add more than 20K of new money to an ISA each tax year.
You have added £20K to the cash ISA and then some more new money to the T212 ISA, so you have gone over the limit. The fact you have withdrawn some from the cash ISA is not relevant.
What you should have done is ask T212 to transfer some of the Cash ISA over from the other provider, as transfers do not count as new money. Although the cash ISA provider may not have allowed part transfers anyway.
I would do nothing. HMRC may or may not contact you. It is not exactly a hanging offence and they are usually lenient with first offenders.

I think the OP meant that they intend to put money into the Trading 212 ISA, but haven't done it yet, so haven't broken the 20K limit yet.

When they wrote "If this is wrong way to do, what shall I do?  Sell everything in my Shares Isa and put back in Chip cash isa." that rather suggests they already have done it. But this has not caused a breach of the £20k limit for the reasons discussed above.

clairec666

masonic said:

clairec666 said:

Albermarle said:

You should not add more than 20K of new money to an ISA each tax year.
You have added £20K to the cash ISA and then some more new money to the T212 ISA, so you have gone over the limit. The fact you have withdrawn some from the cash ISA is not relevant.
What you should have done is ask T212 to transfer some of the Cash ISA over from the other provider, as transfers do not count as new money. Although the cash ISA provider may not have allowed part transfers anyway.
I would do nothing. HMRC may or may not contact you. It is not exactly a hanging offence and they are usually lenient with first offenders.

I think the OP meant that they intend to put money into the Trading 212 ISA, but haven't done it yet, so haven't broken the 20K limit yet.

When they wrote "If this is wrong way to do, what shall I do?  Sell everything in my Shares Isa and put back in Chip cash isa." that rather suggests they already have done it. But this has not caused a breach of the £20k limit for the reasons discussed above.

Ah, I see what you mean. Would be good to see a clear timescale of deposits and withdrawals so we know exactly which order things happened.