Flexi ISA question.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81895070#Comment_81895070

It's likely to make sense to use a flexible cash ISA for an easy access pot where there'll be withdrawals and then replenishments in the same tax year, but that doesn't necessarily need to be your current flexible cash ISA, and also doesn't really seem to have any obvious connection with the money originally having been in a S&S ISA?

20122013

If I want to keep the cash within the ISA wrapper from selling some of my S&S ISA. I will need to put it in a Cash ISA account? Otherwise, any saving interest maybe tax deductible?

masonic

https://forums.moneysavingexpert.com/discussion/comment/81895117#Comment_81895117

You cannot withdraw prior tax year money from one ISA and pay it into a different ISA while keeping it within the ISA wrapper. It will be treated as new money when paid in to the second ISA. If you are ok with this, then any ISA can be used as the second ISA. If your S&S ISA is not flexible (most aren't) then even current tax year money will be treated this way.

Given that, the sensible option would be to open a new cash ISA - the best available at the time you need it, not retain an old one.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81895117#Comment_81895117

ISAs do of course shelter interest income from taxation, but given the various allowances available, interest paid by taxable accounts may give net returns the same or even better, depending on balances, rates, etc, so cash ISAs aren't always the answer…

20122013

https://forums.moneysavingexpert.com/discussion/comment/81895126#Comment_81895126

Do you mean, when / if I sell my S&S ISA, I cannot move the funds to any exiting or new CASH ISA accounts ? or just not my existing Flexi cash ISA (as the funds have to be returned in the same year when it was withdrawl)?

I cannot remember exactly what was announced about the potential new rule for CASH ISAs, I think it was something like, you cannot/ there will be a limit on how much funds from the sell of your S&S ISA can be put into a Cash ISA, is that what the government is (hoping to) propose?

If so, maybe I will keep the funds in a savings accounts.

masonic

https://forums.moneysavingexpert.com/discussion/comment/81895193#Comment_81895193

Right now you can pay up to £20,000 of new money into a cash ISA each tax year. When the new rules kick in that will be £12,000 (unless you are 65+). Withdrawing old money from a S&S ISA does not enable you to pay any more in.

Whereas you can currently transfer an unlimited amount from S&S to cash ISA, using the provider's transfer process, not a withdrawal you make.

In all of this, whether or not you hold an existing flexible cash ISA is irrelevant.