ISA flexibility: withdrawing current tax-year subscriptions and replacing elsewhere

octoask

https://forums.moneysavingexpert.com/discussion/comment/81947705#Comment_81947705

Of course!

I'm new so can't post links but presumably you've read the .gov.uk literature on the new ISA flexibility rules?

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81947715#Comment_81947715

It depends which literature you're referring to, but the usual go-to document is

https://www.gov.uk/guidance/manage-isa-subscriptions-for-your-investors#flexible-isas

although the underlying ISA regulations (including all updates) are the ultimate source of definitive answers:

https://www.legislation.gov.uk/uksi/1998/1870/contents

nottsphil

https://forums.moneysavingexpert.com/discussion/comment/81947710#Comment_81947710

If I persevere with the application having ticked 'yes', are they likely to refuse the application unless they can do a transfer-in? (that's not going to happen this tax year from Monument).

If I change to 'no', what would be the repercussions of just paying in as if it was new money?

octoask

https://forums.moneysavingexpert.com/discussion/comment/81947724#Comment_81947724

Thanks.

I wonder if you could answer this…

Would repaying the £16.5k into T212 and then withdrawing it again, allow me to deposit it into any other ISA?

In other words, I have a £16.5k replacement allowance in T212. If I fill that up and then withdraw the money, can I only replace it in T212 or can it be deposited anywhere (given it's money that has been paid in this tax year, albeit as a replacement?) I'm guessing that paying it back as a replacement means that it is not classed as 'new money' and so upon withdrawal, cannot be placed anywhere but T212 without impacting ISA allowance?

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81947769#Comment_81947769

It might be worth posting your issue in another thread, rather than this one that's specifically about flexibility provisions, as the 'not reflecting current rules' connection is a bit tenuous really?

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81947775#Comment_81947775

Your guess at the end is correct, i.e. redepositing prior year money doesn't turn it into current year money. However, once you've redeposited it into T212, there's nothing stopping you from transferring it directly to a new provider, a process which doesn't affect annual contribution allowances.

octoask

https://forums.moneysavingexpert.com/discussion/comment/81947786#Comment_81947786

That's clear - thank you.

One more question if you don't mind (thanks for your time and patience)

"redepositing prior year money doesn't turn it into current year money."

Does that also apply to money that has gone through the formal transfer process?

Context:

My partner transferred £30k from another ISA to a new T212 ISA this tax year.

Can that £30k be withdrawn from the T212 ISA tomorrow and then deposited to another ISA tomorrow too?

He has already used up his £20k allowance.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81947802#Comment_81947802

That £30K is effectively regarded in the same way as your £20.5K, i.e. it's prior year money (I assume) and if withdrawn from T212 could only be paid back into T212 if not wanting it to be counted towards 2025/26 contribution allowance (which isn't viable if there's no spare headroom there).

So, yes, transferring prior year money doesn't turn it into current year money either.

Is this all hypothetical discussion by the way - after business hours on the last working day of the tax year seems very late to be mulling over what can be done with ISAs?

nottsphil

https://forums.moneysavingexpert.com/discussion/comment/81947781#Comment_81947781

My question is precisely about withdrawing current year subscriptions from a flexible ISA and replacing elsewhere. It's kinda what the thread title says...

molerat

https://forums.moneysavingexpert.com/discussion/comment/81947550#Comment_81947550

Precisely what I have done today to make sure there are no outside of the working week hiccups. Several fixed accounts maturing over the next few months that could need the extra ISA headroom.