Principality Flexible ISA - Replacement allowance query

Jazzking

I transferred an ISA to Principality in Oct 25 of c. £29,000.
This was made up of £19k of 24/25 deposits and £10k of 25/26 money deposited into the previous provider (CMC).  I had deposited a separate £10k in 25/26 into Santander fixed ISA which is still there so I have no further 25/26 allowance remaining.

I have been withdrawing funds from the current Principality ISA (to fund higher paying Regular Savers) but I was of the assumption that any 25/26 withdrawals could be replaced in the same tax year,  as the ISA is flexible (Online Bonus 5 Access Cash ISA Issue 5)

I have withdrawn £13,150 so far, but my stated replacement allowance is only £3,150 - is this correct?  Is it something to do with the fact that only £10k of 25/26 money was transferred in so that's not replaceable?

Hoping to refresh a few RS before April to replenish the ISA and then restart in 26/27 but currently this doesn't seem to be possible based on the stated allowance.....

Woodstok2000

Seems strange - best to speak to them. Maybe something to do with the year 1 balance maximum generally bring £20k (excluding transfers in), that might be confusing the limit calculation?

surreysaver

The 'replaceable allowance' is previous years money.
There should be somewhere that says you've got £20k of this year's allowance (as they won't know you've put money into an ISA elsewhere).

slinger2

It's not just 25/26 withdrawals that can be replaced, it's any withdrawals from a flexible ISA. You need to replace the money in the same tax year that you withdrew it.

If you've withdrawn £13.15k from the ISA the first £10k would have been this year's and the other £3.15k would be from previous years. Looks like Principality are telling you the previous years withdrawals (which can only be replaced in that ISA). The £10k from this year can be replaced anywhere. Some providers treat this year's withdrawals as simply adding money back into your £20k allowance. It's not strictly true but is effectively the same.

In summary: the £3.15k can only go back into this ISA. The £10k can go anywhere (including back into this ISA).

Jazzking

surreysaver said:

The 'replaceable allowance' is previous years money.
There should be somewhere that says you've got £20k of this year's allowance (as they won't know you've put money into an ISA elsewhere).

Thanks, yes, there is exactly this but I'd disregarded it as *I* know that I didn't have any if this year's allowance left, prior to the withdrawals.

slinger2 said:

It's not just 25/26 withdrawals that can be replaced, it's any withdrawals from a flexible ISA. You need to replace the money in the same tax year that you withdrew it.

If you've withdrawn £13.15k from the ISA the first £10k would have been this year's and the other £3.15k would be from previous years. Looks like Principality are telling you the previous years withdrawals (which can only be replaced in that ISA). The £10k from this year can be replaced anywhere. Some providers treat this year's withdrawals as simply adding money back into your £20k allowance. It's not strictly true but is effectively the same.

In summary: the £3.15k can only go back into this ISA. The £10k can go anywhere (including back into this ISA).

Thank you very much, this is really useful. Seems like there's definitely room for confusion especially between ISA providers if customers have moved their money around a bit in-year. Presumably it's all trackable via NI number should HMRC want do do any checks that nobody has broken the rules, intentionally or otherwise?

I've dropped Principality a secure message asking for clarification but the above responses give me confidence if they need me to clarify anything. 

Jazzking

Just for reference, Principality confirmed that it is exactly as @slinger2 explained, so all good and £13,150 available to deposit (not, debit!)

I can confirm when the funds are withdrawn from a flexible ISA, the funds are taken from your current year allowance first, before it debits your replacement allowance.

I can confirm you have a replacement allowance of £3150.00 and £10,000.00 of the current tax years allowance that you can debit <sic> into the account.

(plus good to know I could put the £10k somewhere else if I wanted to, eg into a fix) so thanks for that info too, Slinger

slinger2

Strictly speaking, the word should be "replace".